Q2 2025 Lexicon Pharmaceuticals Inc Earnings Call

Lisa DeFrancesco: Welcome to the LEXICON PHARMACEUTICALS second quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a brief question and answer session. As a reminder, this call is being recorded today, August 6, 2025. I will now turn the call over to Lisa DeFrancesco, SVP Investor Relations and Corporate Communications for LEXICON. Please go ahead, Lisa.

Josh: Thank you, Josh. Good morning and welcome to our second quarter 2025 conference call. Joining me today are Dr. Michael 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 second quarter of 2025, 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 press release, provide a corporate update, and then use the remainder of our time to answer your questions.

Welcome to the Lexicon Pharmaceuticals, second quarter, 2025 Financial results conference call. At this time, all participants are in a listen-only mode. Following Management's prepared, remarks, we will hold a brief question and answer session. As a reminder, this call is being recorded today. August 6th 2025, I will now turn the call over to Lisa, de Francesco SVP, investor relations, and corporate Communications for lexicon. Please go ahead Lisa.

Thank you, Josh. Good morning and Welcome to our second quarter 2025 conference call joining me today are Dr. Mike Eton lexicon's chief executive officer and director Dr. Craig granowitz, senior vice, president, and chief medical officer and Scott keyence senior vice president and Chief Financial Officer.

Josh: 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 pilocarpine, LX-9851, sotalflozin, 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 Mpepa 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.

This morning, lexicon issued a press release announcing our financial results for the second quarter of 2025 which is available on our website at www.lear.com and to 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 press release, provide a corporate update, 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 pill of Aidan LX 9851 Soden and our other drug programs as well as our business generally.

Josh: 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 other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Exton. Mike.

Various risks, may 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, 10K and other SEC filings for detailed information describing such risks.

Mike Exton: Yes, thank you, Lisa, and good day, everyone. Thanks for joining. We're really excited to give you updates on the quarter and all of the great work going on at LEXICON. When we entered 2025, if you recall, we were still in the early days of our strategic pivot to being an R&D-focused company. And now, in the second half of the year, I can say that this transformation has truly taken shape. We've made great strides against our objectives for the year across the board. We're now in a very strong position to advance our innovative portfolio of potential medicines. And I'm pleased to report that all of our lead R&D programs continue to be on track. We've made important progress against each of them in the second quarter, which I'd like to highlight briefly.

I would now like to turn the call over to Mike Exxon Mike, right? Yes. Uh, thank you, Lisa and good day, everyone. Thanks for joining. Uh, we're really excited to give you updates on the quarter and all of the great work going on at lexicon.

Uh, when we entered 2025, if you recall, we'll still in the early days of our strategic pivot, to being an R&D focused company. And now in the second half of the year, I can say this transformation is truly taken shape.

Made great strides against our objectives for the year across the board. We're now in a very strong position to advance our Innovative portfolio of potential medicines.

Mike Exton: For pilocarpine, we've completed the secondary analysis of our phase 2B progress results following the announcement of top-lining data in the first quarter. We're now in the process of analyzing the totality of phase 2 data, which supports the broad potential for this novel mechanism, while re-engaging in discussions with potential partners with this additional data in hand. Secondly, LX-9851, our first-in-class candidate for the treatment of obesity, is on track to complete I&D enabling studies in 2025. We look forward to continued collaboration with our licensee, Novo Nordisk. For sotalflozin, we've really hit the accelerator on our phase 3 SONATA study in hypertrophic cardiomyopathy, or HCM, which is the only phase 3 HCM program enrolling currently, evaluating soda in both obstructive and non-obstructive subtypes of HCM. We've made excellent progress on site initiations globally, and Craig will elaborate on this shortly.

And I'm pleased to report that all of our lead R&D programs continue to be on track. We've made important progress against each of them in the second quarter which I'd like to highlight briefly.

Philip Aidan. We've completed the secondary analysis of our phase, 2B progress, results following the announcement of top light and data in the first quarter. Uh, we're now in the process of analyzing the totality of phase 2 data, which supports the broad potential for this novel mechanism, while re-engaging in discussions with potential partners, with this additional data in hand,

Secondly, LX 9851 our first in-class candidate for the treatment of obesity is on track to complete IMD enabling studies in 20125. So we look forward to continued collaboration with our licensee Nova Nordisk.

The soda glyen, we've really hit the accelerator on our 5. Our phase 3, Sonata study in hypertrophic cardiomyopathy or HCM which is the only phase 3 HCM program in Rolling currently evaluating soda in both obstructive and non-obstructive subtypes of HCM.

Mike Exton: Lastly, but importantly, we're also working closely with our licensee, Beatrice, on expanding the reach of sotalflozin in territories outside of the US and EU, and we're making great progress on that front as well. So, in summary, the team's hard at work, and it was an incredibly productive quarter for us that I'm very proud of. Now, before I turn the call over to Craig to talk in detail about the great progress in the pipeline, I want to take a moment to acknowledge a milestone. July marked one year since I joined as CEO of LEXICON, and as I reflect on all the changes that we've seen in that 12 months, I'm truly proud of the dedication and adaptability of this team. We've successfully advanced multiple programs to late-stage development and beyond, and we look forward to reporting even more progress to come.

We've made excellent progress on site, initiations globally and Craig. Will elaborate on this shortly.

Lastly, but importantly, we're also working closely with our licensee, virtus on, expanding the reach of soda flows and in territories outside of the US and the EU. And we're making great progress on that front as well. So in summary the team's hard at work and it was an incredibly productive quarter for us that I'm very proud of

Now, before I talk turn the call over to Craig to talk in detail about the great progress in the pipeline.

I want to take a moment to acknowledge your milestone.

Mike Exton: And on that note, I'd like Craig to give a more detailed update on our pipeline program. So, over to you, Craig.

Uh, July Mark, 1 year since I joined the CEO of lexicon. And as I reflect on all the changes that we've seen in that 12 months, I'm truly proud of the dedication and adaptability of this team. We successfully Advance multiple programs to late stage development and Beyond, and we look forward to reporting even more progress to come.

Lisa DeFrancesco: Thanks, Mike. I'll start by discussing pilocarpine. First quarter, we announced top-line results of our phase 2B progress study of pilocarpine in DPMP. DPMP is a chronic and progressive pain disorder that impacts approximately 30% of people with type 1 diabetes and up to 50% of those with type 2 diabetes. These patients experience burning pain, loss of sensation, and other side effects that can severely impact their quality of life. Importantly, in both our phase 2B progress study and our phase 2A relief study, pilocarpine 10 milligrams delivered consistent, clinically meaningful reductions in these painful symptoms. Based on these data, we have concluded the 10 milligram dosage strength warrants further evaluation and is the appropriate dose to take forward into late-stage development. We recently convened a scientific advisory board with expertise across clinical development, regulatory, and neuropathic pain to review the full body of evidence for pilocarpine in DPMP.

And on that note I'd like Craig to give a more detailed update on our pipeline program so over to you Craig.

Thanks, Mike. I'll start by discussing till of Aidan.

First quarter, we announced Topline results of our phase. 2B progress study of pill of Aidan in dpnp

Dpmp is a chronic and Progressive pain disorder that impacts approximately 30% of people with type 1 diabetes and up to 50% of those with type 2 diabetes.

These patients experience burning pain.

Loss of sensation and other side effects that can severely impact their quality of life.

Importantly in both our phase, 2B progress study and our Phase 2, a relief, study pill of Aid in 10 milligrams, delivered consistent, clinically meaningful, reductions in these painful symptoms. Based on these data we have concluded the 10 milligram dosage strength warrants for further evaluation and is the appropriate dose to take forward into late stage development.

Lisa DeFrancesco: This esteemed group provided encouraging feedback and validated our key findings from the top-line data readouts, including the following. First, the advisory board confirmed that pilocarpine demonstrates clinically meaningful efficacy. Second, they confirmed the 10 milligram dose is the appropriate dose for future registrational studies. This gives us clarity on our path forward and validates the dose-finding work we've done to date. Third, the board reaffirmed the safety and tolerability profile of the 10 milligrams supports advancement into late-stage development. And finally, they provided validation and valuable input into phase 3 study design, including suggestions to potentially lower the placebo response rate, which we believe could reduce potential study variability. The panel support gives us tremendous confidence as we prepare for our next steps and engage with potential partners for pilocarpine.

We recently convened a Scientific Advisory Board with expertise across clinical development, regulatory affairs, and neuropathic pain to review the full body of evidence for the pill of Aidan and DPNP.

This is steam group, provided encouraging feedback, and validated. Our key findings from the Topline data readouts, including the following

First, The Advisory Board confirmed that pill of Aidan demonstrates, clinically meaningful efficacy.

Second they confirmed the 10 milligram doses, the appropriate dose for future. Registrational studies.

This gives us Clarity on our path forward and validates, the dose finding work. We've done today.

Third, the board, reaffirmed, the safety and tolerability profile of the 10 milligram supports advancement into late stage development.

Rate which we believe could reduce potential study variability.

Lisa DeFrancesco: It reinforces our belief that we have a potentially transformative therapy for the millions of patients living with this debilitating condition. I also wanted to acknowledge that our analysis of the pilocarpine development program supports its compelling value proposition with a validated mechanism of action of AK1, compelling clinical profile, and broad potential applicability across multiple indications, and demonstrates why we believe pilocarpine represents a true portfolio and a pill opportunity. Overall, beginning with efficacy, pilocarpine has demonstrated consistent and clinically meaningful pain reduction across three separate phase 2 trials in neuropathic pain. While our lead indication in DPMP represents a mature clinical development program that is ready for phase 3 advancement, several secondary indications, such as spasticity, are also phase 2 ready, providing significant pipeline expansion opportunities. In addition, our preclinical work has been extensive.

The panel support gives us tremendous confidence as we prepare for our next steps and engage with potential partners for pill of Aidan. It reinforces our belief that we have a potentially transformative therapy for the millions of patients living with this debilitating condition.

I also wanted to acknowledge that our analysis of the pill of Aid and development program supports its compelling. Value proposition with a validated mechanism of action of ak1 compelling clinical profile and Broad potential applicability across multiple indications.

And demonstrates, why we believe pill of Aidan represents a true portfolio on a pill opportunity

Overall, beginning, with advocacy, to evident has demonstrated consistent and clinically meaningful pain, reduction, across 3, separate Phase 2, trials, and neuropathic pain.

While our lead indication in dpmp represents a mature clinical development program, that is ready for phase 3 advancement several secondary indications such as spasticity are also Phase 2 ready. Providing significant pipeline expansion opportunities.

Lisa DeFrancesco: We've completed I&D enabling studies across multiple neuroscience indications, both central and peripheral, establishing a broad foundation for further clinical development beyond our current focus areas. We've accumulated data from more than 600 patients treated with pilocarpine to date, demonstrating a suitable safety and tolerability profile. This extensive safety database will be valuable as the program moves into late-stage development and regulatory discussions. Finally, pilocarpine benefits from patent protection extending through 2040 when including an anticipated five-year patent term extension. This provides substantial commercial exclusivity to maximize the value of our investment in this area. Moving on to sotalflozin and HCM, there are more than a million people with HCM in the United States. Of those, our previous research suggests approximately one-third have non-obstructive HCM and two-thirds have obstructive HCM, in which the thickening of the heart muscle wall blocks or reduces the blood flow to the heart.

In addition, our pre-clinical work has been extensive. We've completed IND, enabling studies across multiple Neuroscience indications, both Central and peripheral.

Establishing a broad foundation for further clinical development beyond our current Focus areas.

We've we've accumulated data from more than 600 patients treated with pill of Aidan to date.

Demonstrating a suitable, safety and tolerability profile.

This extensive safety database will be valuable as a program moves into late stage development and Regulatory discussions.

Finally Hill of appid and benefits from patent protection, extending through 2040 when including an anticipated 5-year, patent term extension.

This provides extend substantial commercial exclusivity to maximize the value of our investment in this area.

Moving on to SOS and in HCM.

Lisa DeFrancesco: However, more recent technology, including more sensitive diagnostic and AI-assisted tools, suggests that the incidence of non-obstructive HCM could be much higher, potentially 50% or greater. This chronic progressive disease can lead to more serious complications. 43% of patients with HCM have progressive heart failure, and HCM can also lead to atrial fibrillation and stroke. The medical community's understanding of how to diagnose and treat HCM has grown significantly in recent years, as there are a number of innovations in development for HCM, including the approval of cardiac myosin inhibitors for obstructive HCM. However, despite substantial commercial investment and increased awareness of HCM, CMIs have only penetrated approximately 1% of the total HCM market. With this treatment landscape in mind, we believe sotalflozin offers several unique advantages as a potential therapeutic option for HCM.

There are more than a million people with hm. In the United States of those are previous research suggests approximately 1/3 have not obstructive ATM and 2/3. Have obstructive. Hm in which the thickening of the heart muscle wall blocks or reduces the blood flow to the heart.

however more recent technology including a more sensitive Diagnostic and AI, assisted tools suggest that the incidence of non-obstructive HCM could be much higher potentially 50% or greater

This chronic progressive disease that can lead to more serious complications.

43% of patients with HCM, have Progressive, heart, failure, and HCM can also lead to atrial fibrillation and stroke.

The medical community's understanding of how to diagnose and treat HTM has grown significantly in recent years. As there are a number of Innovations in development for HTM, including the approval of cardiac myosin inhibitors for obstructive HCM.

However, despite substantial commercial investment and increased awareness of HCM. Cmis have only penetrated approximately 1% of the total HCM Market.

Lisa DeFrancesco: First, it has a novel MOA as a dual mechanism SGLT-1, SGLT-2 inhibitor and is the only HCM agent under investigation that works both inside and outside the heart. This enables treated patients to potentially achieve symptom reduction while simultaneously targeting other outcomes such as heart failure and major adverse cardiovascular events, where sotalflozin has demonstrated benefits. Second, as more data is generated, it is becoming increasingly clear that sotalflozin is uniquely myocardial targeted. From a practical standpoint, the once-daily oral dosing profile facilitates broad clinical adoption, convenience, and compliance. Importantly, this comes without the burden of a risk evaluation and mitigation strategies or REMS requirements that can complicate treatment. It is worth noting that sotalflozin is already approved for heart failure. To date, we've observed no increased risk of atrial fibrillation, which is a critical consideration in this patient population.

With this treatment landscape in mind, we believe sosan offers several unique advantages as a potential therapeutic option for HCM.

First, it has a novel MOA as a dual mechanism sglt1, sglt2 inhibitor and is the only HCM agent under investigation that both that works both inside and outside the heart.

This enables treated patients to potentially achieve symptom reduction while simultaneously targeting other outcomes such as heart, failure and major adverse cardiovascular events. Where SoDo glyos has demonstrated benefits,

Second. As more data is generated, it is becoming increasingly clear. That SoDo glyos is uniquely my myocardiopathy convenience and compliance. Importantly this comes without the burden of a risk evaluation and mitigation strategies or Rems requirements that can complicate treatment.

It is worth noting that sosan has already approved for heart failure.

Lisa DeFrancesco: Looking forward, we're pursuing a broad proposed indication that encompasses both non-obstructive and obstructive HCM phenotypes. This positions sotalflozin for potentially either use as monotherapy or in combination with other agents, providing clinicians with valuable flexibility in treatment planning. We have amassed a wealth of data from studies confirming SOTA's mechanism of action in HCM and related conditions summarized here. Specifically, the animal models studied demonstrate sotalflozin improves cardiac function and reduces wall thickness, left ventricular mass and fibrosis, and cardiac inflammation, while the ex vivo models demonstrated the direct effects of sotalflozin on the myocardium by reducing both stroke work and increasing metabolites associated with improved cardiac energetics. Collectively, these studies provide evidence that SOTA has a unique ability to work across multiple markers of the disease.

To date. We've observed, no increase risk of atrial fibrillation, which is a critical consideration. In this patient population.

Both non-obstructive and obstructive HCM phenotypes.

This position, SoDo Gosen, can potentially be used as monotherapy or in combination with other agents, providing clinicians with valuable flexibility in treatment planning.

We have amassed a wealth of data from studies confirming sodas mechanism of action in HCM and related conditions, summarized here.

Specifically, the animal model studied.

Demonstrate.

Lisa DeFrancesco: Now, I want to spend some time talking through the current ongoing clinical program, beginning with our own phase 3 SONATA HCM study of sotalflozin in HCM. SONATA HCM is a large global registration trial with a KCCQ primary endpoint designed to support a regulatory filing and broad label in HCM. SONATA HCM is the only ongoing registrational trial currently evaluating a treatment in both obstructive and non-obstructive HCM. We have recently surpassed 100 sites initiated in 20 countries, including the US, Europe, Israel, and Latin America, and we're well positioned to meet our goal of 130 sites actively enrolling patients by the end of the third quarter of 2025. There are two important investigator-initiated studies underway that are designed to evaluate cardiac function of sotalflozin in HCM. The first is SOTA-PCARDIA being conducted by Dr.

Surgical photos and improves cardiac function and reduces wall thickness left ventricular mass and fibrosis and cardiac inflammation while the xvivo models demonstrated, the Direct effects of sin on The myocardium. By reducing both stroke work and increasing metabolites associated. With improved, cardiac energetics collectively, these studies provide evidence, that soda has a unique ability to work across multiple markers of the disease.

Now, I want to spend some time talking through the clinical on the current ongoing clinical program, beginning with our own phase 3, Sonata ATM study of SoDo

Sonata ACM is a large Global registration trial with a kccq primary endpoint designed to support a regulatory filing and Broad label in HCM.

Sonata HCM is the only ongoing registrational trial currently evaluating a treatment in both obstructive and non-obstructive HCM.

We have recently surpassed 100 sites, initiated in 20 countries including the U.S., Europe, Israel, and Latin America, and we are well positioned to meet our goal of 130 sites actively enrolling patients by the end of the third quarter of 2025.

There are 2 important investigator initiated studies underway that are designed to evaluate cardiac function of sin in HCM.

Lisa DeFrancesco: Juan Botamán and colleagues at the Mount Sinai School of Medicine in New York City. This study is designed to investigate the cardiorenal mechanistic benefits of sotalflozin in 88 non-diabetic patients with HFpEF, which, as you recall, is a subset of HCM. It is a six-month study comparing sotalflozin 400 milligrams and placebo on the following endpoints: change in left ventricular mass, functional performance, and quality of life measurements. This study was completed in July 2025, and the investigators are currently evaluating the data. The second study I wanted to highlight is SOTA-CROSS, a 12-week crossover study funded by the NIH and being conducted by Dr. Charlene Day at the Penn School of Medicine, comparing sotalflozin and placebo on exercise capacity, physical activity, and symptoms, and diastolic function in patients with symptomatic non-obstructive HCM. We already have shown that SOTA strongly improves diastole in FPEF.

The first is soda picardia being conducted by Dr. Juan botoman and colleagues at the Mount Sinai School of Medicine in New York City.

This study is designed to investigate the cardio renal mechanistic benefits of SoDo in 88. Non-diabetic patients with heppp which as you recall is a subset of of HPM

It is a it is a 6-month study comparing sort of AOS in 400 mg and Placebo on the following endpoints change in left ventricular, Mass, functional performance, and quality of life measurements. This study was completed in July, 2025, and the investigators are currently evaluating the data.

The second study I wanted to highlight is soda. Cross a 12-week crossover study funded by the NIH and being conducted by Dr. Sharlene day at the Penn School of Medicine, comparing sodal faozan and Placebo on Exercise capacity, physical activity, and symptoms and diastolic function in patients with symptomatic non-obstructive HCM.

Lisa DeFrancesco: SOTA-CROSS will aim to specifically ascribe such functional benefits in non-HCM as well. Together with SOTA with SONATA HCM, this study could potentially be a major therapeutic advance for a large subset of patients who have limited treatment options. Last but not least, we remain on track to complete the I&D enabling studies this year for LX-9851, our first-in-class ACSL5 inhibitor for the treatment of obesity and related metabolic disorders. LX-9851's oral administration, preclinical findings to date, and possibility for both monotherapy and combination applications provide a compelling profile and the potential to occupy a unique space in the treatment landscape. And we look forward to working with our partner, Novo Nordisk, to maximize the potential of this innovative investigational medicine. With that, Scott Coiante, our CFO, will now provide a report of our financial results for the second quarter.

We have already shown that soda strongly improves diastole in F paths that are slow to cross. We will aim to specifically ascribe such functional benefits in non-HCM as well.

Together with soda, Sonata HCM, this study could potentially be a major therapeutic Advance or a large subset of patients who have limited treatment options.

Last but not least, we remain on track to complete the IND. Enabling studies this year, for LX, 9851 our first in class, ACS L5 inhibitor for the treatment of obesity and related metabolic disorders.

Alex, 9851 oral Administration, preclinical findings to date and possibility, for both monotherapy and combination applications provides a compelling profile and the potential to occupy a unique space in the treatment landscape.

And we look forward to working with our partner, Novo Nordisk, to maximize the potential of this innovative investigational medicine.

Scott Coiante: Thank you, Craig, and good morning, everyone. For the second quarter of 2025, we reported 28.9 million in revenue compared to 1.6 million for the second quarter of 2024. Q2 2025 revenue consisted primarily of 27.5 million of licensing revenue recognized from the Novo Nordisk agreement. As a reminder, we received the upfront payment of $45 million from Novo in April, which was initially recorded as deferred revenue and is being recognized as revenue throughout the remainder of 2025 as the I&D enabling work is completed. Total revenues for the quarter also include net product revenue of 1.3 million from sales of Mpepa. Research and development expenses for the second quarter of 2025 decreased to 15.7 million from 17.6 million in Q2 2024, primarily reflecting lower external research expense on our progress clinical trial study, partially offset by increased investment in our SONATA phase 3 clinical study in HCM.

With that Scott keante, our CFO will now provide a report of our financial results for the second quarter.

Thank you, Craig. And good morning everyone.

For the second quarter of 2025, we reported 28.9 million in Revenue, compared to 1.6 million for the second quarter of 2024.

Q2 2025 revenue consisted primarily of $27.5 million of licensing revenue recognized from the Novo Nordisk agreement.

Recorded as deferred revenue and is being recognized as Revenue throughout the remainder of 2025 as the IND enabling work is completed.

Total revenues for the quarter. Also include net product, revenue of 1.3 million from sales of impa.

Scott Coiante: Selling general and administrative expenses for the second quarter of 2025 decreased to 9.4 million compared to 39.2 million in 2024. The decrease reflects lower costs as a result of our strategic repositioning announced in late 2024 and the significantly reduced marketing efforts in 2025 for Mpepa. Net income for the second quarter of 2025 was 3.3 million or 1 cent per share as compared to a net loss of 53.4 million or 17 cents per share in the corresponding period in 2024. The net income for the quarter was primarily a result of the revenue recognized from the Novo Nordisk licensing agreement in Q2. We expect to recognize the remaining 17.5 million of licensing revenue from the Novo agreement in the second half of this year as the I&D enabling work is completed.

Research and development expenses. For the second quarter of 2025, decreased to 15.7 million from 17.6 million in 2q 2024, primarily reflecting lower, external research. Expense on our progress, clinical trial study partially offset by increased investment in our Sonata phase 3 clinical study in HCM,

Selling General and administrative expenses for the second quarter of 2025 decreased to 9.4 million compared to 39.2 million in 2024.

The decrease reflects lower costs as a result. Our strategic repositioning, announced in late 2024, and the significantly reduced marketing efforts in 2025 for Impecca.

Net income for the second quarter of 2025 was 3.3 million or 1 cent per share as compared to a net loss of 53.4 million or 17 cents per share in the corresponding period in 2024. The net income for the quarter was primarily result of the revenue recognized from the novo, nordice licensing agreement in Q2.

Scott Coiante: We ended the second quarter with 168 million in cash, short-term investments, and restricted cash as compared to 238 million as of December 31, 2024. In summarizing our financials, I would like to note a few highlights from the quarter. We've used the $45 million upfront payment received from the Novo licensing agreement to strengthen our balance sheet by reducing our long-term debt, a portion of our long-term debt. On the expense side, we've made significant progress reducing our costs and streamlining our operations. Quarter-over-quarter operating expenses decreased by 31.9 million, primarily due to the strategic repositioning as an R&D-focused company announced late in 2024. Reviewing our full-year 2025 guidance, we're lowering our operating expense projections for the year. Total operating expenses are now expected to be in the range of 105 to 115 million from 135 to 145 million previously announced.

We expect to recognize the remaining 17 and 1.5 million of Licensing revenue from the novo agreement. In the second half of this year, as the int enabling work is completed.

We ended the second quarter with 168 million in cash, short-term Investments and restricted cash as compared to 238 million as of December. 31st 2024.

In summarizing our financials. I would like to note a few highlights from the quarter.

We've used the 45 million upfront payment received from the novo licensing agreement, to strengthen our balance sheet by reducing. Uh, our long-term debt

A portion of our long-term debt on the expense side. We've made significant progress, reducing our costs and streamlining our operations.

Quarter over quarter operating expenses decreased by 31.9 million primarily due to the Strategic repositioning as an R&D focused company. Announced late in 2024

reviewing our full year 2025 guidance. We're lowering our operating expense projections for the year.

Total operating expenses are now expected to be in the range of 105 to 115 million.

Scott Coiante: R&D expenses are now projected to be in the range of 70 to 75 million, down from a range of 100 to 105 million, primarily as a result of the transfer of costs to Novo under our licensing agreement with them. SG&A expenses remain between 35 and 40 million. Our R&D expense assumptions do not include costs associated with phase 3 pivotal studies of pilocarpine, as our goal will be to take this asset forward with a development partner. Overall, we are in a strong position with the resources we need to advance our ongoing clinical programs while maintaining a disciplined approach to capital allocation and a focus on creating value for our shareholders. Now, I'll turn the call back to Mike for closing remarks.

From $135 million to $145 million previously announced.

R&D expenses are now projected to be in the range of 70 to 75 million down from a range of 100 to 105 million.

Primarily as a result of the transfer of cost to Novo under our licensing agreement. With that

Sgna expenses, remain between 35 and 40 million.

Our R&D expense assumptions. Do not include cost associated with phase 3, pivotal studies of pivoting. As our goal will be to take this asset forward with a development part.

Overall, we are in a strong position with the resources. We need to advance our ongoing clinical programs. While maintaining a disciplined approach to Capital, allocation and the focus on creating value for our shareholders,

Mike Exton: Yeah, thanks, Scott and Craig. Now, as you...

Now, I'll turn the call back to Mike for closing remarks.

yeah, thanks Scott and Craig now as you

Lisa DeFrancesco: Please stand by or conference will resume momentarily. Please stand by or conference will resume momentarily. Please stand by or conference will resume momentarily. Please stand by.

Please stand by or conference rulers. Do a momentarily, please stand by your conference or resume momentarily.

Please stand by our conference will resume momentarily. Please stand by.

Mike Exton: Well, apologies for that brief interruption when I'm getting to the punchline here. But look, let me go back and say that we've got lots of exciting updates in the second half of 2025. And clearly, as we've outlined, partnering is an essential part of how we plan to advance all of our assets. And on this slide, it really highlights the partnership strategy and action. Firstly, Beatrice is making great progress and has recently received its first approval of sotalflozin in the United Arab Emirates, which was a really short turnaround time, and has also filed for regulatory approval in Saudi Arabia and is expecting to file for regulatory approval in Canada, Australia, New Zealand, Mexico, and a number of Southeast Asian countries before the end of this year.

Well, apologies for that brief Interruption, right when I'm getting to the punch line here, but um, look, let me, let me go back and and say that we've got lots of exciting updates uh, in the second half of 2025, and clearly as we've outlined partnering is an essential part of how we plan to advance all of our assets. And on this slide really highlights the partnership strategy and action.

Firstly Vitus is making great progress. And as recently, received its, first approval of Sloan in the United Arab Emirates, which was a really short, turnaround time and has ALS filed for regulatory approval in Saudi Arabia, and is expecting to file for regulatory approval in Canada, Australia, and New Zealand, Mexico, and a number of Southeast Asian countries before the end of this year.

Mike Exton: We aim to maximize the potential of LX-9851 with our licensee, Novo Nordisk, a global expert in obesity and related conditions, and partnership discussions are ongoing for pilocarpine, where we hope to collaborate with a high-quality partner to unlock the pipeline in the pill potential of this asset globally and across multiple indications. This flexible partnership strategy is intended to allow us to follow the science broadly, but really remain focused internally on our core cardio-metabolic expertise. And so, as you can see on this slide, we're exceptionally well positioned with a number of pipeline opportunities. From our late-stage assets to our newest opportunities, whether organically or with a partner, we expect these programs to continue to add value and bring new innovation to patients over the longer term. Now, as we look further into 2025, we're excited about where LEXICON stands at this moment.

We aim to maximize the potential of LX 9851 with our licensee Nova, Nordisk Global expert in obesity and related conditions and partnership. Discussions are ongoing for pill of Aidan where we hope to collaborate with a high quality partner to unlock the pipeline in a pill potential of this asset globally and across multiple indications.

This flexible partnership strategies intended, to allow us to follow the science broadly, but really remain focused internally on our core cardio. Metabolic expertise.

And so as you can see on this slide, we're exceptionally well, positioned with a number of pipeline opportunities from our late stage assets, to our newest opportunities. And whether organically or with a partner, we expect these programs to continue to add value and bring new innovation to patients over the longer term.

Mike Exton: Starting with pilocarpine, we're expecting full progress data to be presented in Q3. We're also planning our end of phase 2 meeting with timing to be dependent on our partnership discussions. Our preclinical work to broaden the value of this asset into additional indications continues, and additionally, a broad partnership for pilocarpine will allow us to become therapeutically focused on our core cardio-metabolic programs and expertise. For SOTA in HCM, our SONATA study is making excellent progress. Sites in the US, EU, Israel, and LATAM are currently enrolling, and we expect all phase 3 sites to be running by Q3. We also expect results from certain investigator-initiated studies of SOTA as early as Q4 of this year, which could provide valuable additional insights to the body of data on this therapeutic candidate. For Mpepa, Beatrice is continuing to handle regulatory submissions and approvals outside the US and EU.

Now, as we look further into 2025, we're excited about where lexicon stands at this moment.

Starting with pill of Aidan. We're expecting full progress data to be presented in Q3.

Also planning, our end of phase 2 meeting with timing to be dependent on our partnership discussions.

Our pre-clinical work to broaden the value of this asset into additional indications. Continues and additionally, a broad partnership for pill of Aidan will allow us to become therapeutically focused on our core cardio, metabolic programs and expertise.

For soda in HCM, our Sonata study is making excellent progress. Sites in the US EU Israel and latam are currently enrolling and we expect All Phase 3 sites to be running by Q3.

We also expect results from certain investigator initiated studies of soda as early as Q4 of this year, which could provide valuable additional insights to the body of data on this therapeutic candidate.

Mike Exton: They've been really a fantastic partner, fully engaged and motivated. And we expect that these approvals will build significantly on the stabilized sales of Mpepa in the US, where my team has achieved by a strong mix of focused execution and innovation. For Zenquista, the end-of-review evaluation process is underway. As you've no doubt seen, there's been an outpouring of patient support advocating for the approval of Zenquista in type 1 diabetes, and we're committed to pursuing all potential avenues for this program. And last but not least, LX-9851, our I&D enabling studies for obesity are progressing really, really well, with a target completion by the end of the year. So, if you look across this pipeline, any of these programs have the potential to transform patient lives and create significant value for LEXICON.

For in Peppa Vitus continuing to handle regulatory submissions and approvals out outside the US and EU. They've been really a fantastic partner fully engaged and motivated and we expect that these approvals will build significantly on the stabilized sales of impecca in the US where my team has achieved by a strong mix of focused execution and innovation.

This is encuesta. The end of review evaluation process is underway.

As you've no doubt seen, there's been an outpouring of patient support advocating for the approval of zinca and type 1, diabetes. And we're committed to pursuing all potential avenues for this program.

And last but not least LX, 9851 our IND enabling studies for obesity of progressing. Really, really well with the target completion by the end of the year.

Mike Exton: But we believe that the simultaneous advancement of all five programs makes our position very compelling as we move through 2025, where we have a significant amount of opportunities for success. And with that, we conclude our introductory remarks and turn it to you, operator, for some Q&A.

So if you look across this pipeline, any of these programs has the potential to transform. Patient lives and create significant value for lexcon.

But we believe that the simultaneous advancement of all five programs makes our position very compelling as we move through 2025, where we have a significant amount of opportunities for success.

Lisa DeFrancesco: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. One moment for questions. Our first question comes from Yasmeen Rahimi with Piper Sandler. You may proceed.

And with that, we conclude our, uh, introductory remarks, and turn it to your operator for some Q&A.

Thank you as a reminder, to ask a question. Please press star 1, 1 on your telephone and wait for your name to be announced to withdraw your question. Please. Press star 1 1 again, 1 moment for questions.

Jasmine Raimi with Piper Sandler. You may proceed.

Speaker 5: Hi, this is Liam Ahn for Yasmeen Rahimi. Great presentation this morning. We just were really impressed by the SOTA-CROSS trial that's upcoming with potential data mid to late 2026. So, we were just wondering maybe if you can kind of walk us through, given the small sample size of the study, what are the doses being assessed and how much the inclusion/exclusion criteria resembles SONATA? And kind of like in that vein, whether you expect to see like a static separation on the efficacy endpoint and also why an HCM was selected rather than an OHCM patient population.

Hi. This is Liam on for Yasmine Raimi. Um, great presentation this morning. Um we just we were really impressed by the soda cross trial. Um, that's upcoming with potential data, Miss late 2026. So we were just wondering, maybe if you can kind of walk us through giving the small sample size of the study. Um, what are the doses being assessed and how much the inclusion exclusion criteria resembles, Sonata, and kind of like in that vein, whether you expect to see like a statistic, Separation on the epoche endpoint and also why nhm was selected rather than an ocm patient population.

Mike Exton: Yeah, thank you, Liam, for the question. We're really excited about working with Dr. Day on this NIH-supported mechanistic trial. And I think the idea behind the NIH's interest in this was to continue to look at therapeutic options outside the CMIs that would be much more widely applicable and more readily implementable across the United States for this large unmet medical need. Non-obstructive HCM, I think, was also the target for the NIH grant because there are options available for obstructive. There are surgical options and now medical options, but there are no treatment options that have been approved for non-obstructive. Relative small size of the study belies its significant power to accomplish its goals. By having a crossover design, you use the patient as their own control in the study. And the study has a number of important diagnostic, both imaging and physiologic outcomes.

Yeah. Thank you. Liam for the the question. Uh we're really excited about working with uh Dr. Day on this NIH supported mechanistic trial. And I think the idea behind the NIH is interest in this was to continue to look at therapeutic options outside. The cmis that would be much more widely applicable.

Uh and uh more readily implementable across the United States. For this large, unmet medical need

Not obstructive. Hm I think was also the target for the NIH Grant because there are options available for obstructive their surgical options are now medical options but there are no treatment options that have been approved for non-obstructive.

Relative small size of the study belies. Its significant power to accomplish its goals by having a crossover design. You use the patient as their own control in the study and the study has a number

Mike Exton: The inclusion criteria is very similar to that in the SONATA HCM trial, which is a very broad cross-section of patients without diabetes who have a non-obstructive HCM. The only difference is that in SOTA-CROSS, there's not an allowance for patients on a CMI, but in SONATA HCM, there actually is. So, SONATA HCM is even more broadly applicable. We believe that if you look at all of the data together in its totality, and what we try to do really as we think about lifecycle management strategically is to look at the totality of the benefit of sotalflozin both mechanistically, imaging, and clinically across a range of heart failure, MACE, and HCM using different trials to look at different aspects.

Of important, um, diagnose, uh, both Imaging and physiologic outcomes, the inclusion criteria is very similar to that in the Sonata Samra, which is a very broad cross-section of patients without diabetes, who have, um, a non-obstructive ATM. The only difference

Is that in sort of cross, there's not an allowance for patients on a CMI but in Sonata CM, there actually is so sonat. Hm is even more, broadly applicable.

we believe that if you look at all of the data together in its totality and what, what we've tried to do really, as we think, about life, cycle, management, strategically,

Is to look at the totality of the benefit of SOS in both mechanistically.

Mike Exton: And one of the reasons we presented all three of SONATA HCM, SOTA-CROSS, and the SOTA-PCARDIA study is that they are looking at different aspects of the physiology and clinical findings of patients with HFpEF and HCM.

Imaging and clinically across a range of heart, failure, mace, and and HCM using different trials to look at different aspects and 1 of the reasons we presented all 3 of Sonata HCM soda cross.

And the soda picardia study is that they are looking at different aspects of the physiology and clinical findings of patients with heft pests and HCM.

Speaker 5: Thanks so much.

Thanks so much.

Lisa DeFrancesco: Thank you. Our next question comes from Andrew Tsai with Jefferies. You may proceed.

Thank you.

Our next question comes from Andrew Tsai with Jeffrey, he may proceed.

Speaker 5: Hi, good morning. Thanks for the updates and thank you for taking my questions. A couple of questions on pain. Recently, RFK Jr. mentioned how he wanted to promote the development of non-opioid pain drugs like Vertex's Gerinevax. And so, is there something you guys can do to take advantage of this new development? And could it, for instance, make sense to apply to the Commissioner's National Priority Voucher program? Thanks.

Mike Exton: Yeah, thanks, Andrew. In fact, my team has been very actively engaged from a legislative perspective, particularly with the Alternatives to Pain Act, which is the act that's supporting the use of non-opioid medications in chronic pain. And we've been really supporting the utility and the passing of that particular act. And we're seeing bipartisan support for this very important facet of the management of pain. In addition to that, like we have done with type 1 diabetes, it's also patient advocacy groups that are very compelled to get new treatments.

Hi, good morning. Thanks for the updates, and uh, thank you for taking my questions. Um, a couple of questions on pain. Recently, RFK Junior mentioned how he wanted to promote the development of non-opioid pain drugs like Vertex's Journal of Acts. Is there something you guys can do to take advantage of this new development? Could it, for instance, make sense to apply to the Commissioner's National Priority Voucher Program? Thanks.

Yeah. Thanks Andrew. And in fact, uh, my team has been very actively engaged, um, from my uh, legislative uh uh perspective. Particularly with the alternatives to pain act, which is the act that's uh supporting the use of non-opioid medications. Um,

Mike Exton: And really, all of those things are just a factor for, I think, what is really a zeitgeist in the realization that, particularly for chronic pain, actually, even though there are new alternatives for acute pain, the real issue for non-opioid alternatives lies within the realm of chronic use over many years, where the addictive potential is clearly much more significant. And so, we're very encouraged by the bipartisan enthusiasm in this area. And we think that as we progress pilocarpine into phase 3 and then beyond, that this not only gives great support for continuing to develop pilocarpine, but importantly, once it achieves commercial reality, clearly it provides a pathway for great access and ease of patients getting onto this non-opioid medication.

In chronic pain and, uh, we've been really supporting the the, uh, utility and the passing of of that particular act. Uh, and we're seeing bipartisan support for this, uh, very important facet of the management of pain. Uh, in addition to that, um, like we have done with type 1 diabetes. It's also a patient advocacy groups that are that are very compelled uh, to get new treatments. Uh, and really all of those things are just a factor for. I think, what is really a Zeitgeist in the realization that particularly for chronic pain actually? Even though there are new alternatives for acute pain, the real issue for non-opioid Alternatives, uh, is lies within the realm of chronic use over many years where the addictive potential is clearly much more significant. Uh, and so we're very encouraged by the bipartisan.

Speaker 5: Right, thank you. And it sounds like you will have the FDA meeting by year-end now. And so, in theory, in that meeting, to you guys, what would be the realistic, quote-unquote, "worst case scenario" that can arise from that meeting?

You think that it is, we progress pill of Aidan interface 3, and then beyond that, this not only gives great support for continuing to, uh, to develop pill of Aidan. But importantly, once it achieves, uh, commercial reality, um, clearly it provides a pathway for great access and um uh ease of patience getting onto this non-opioid medication.

Right. Thank you. And it sounds like you will have the FDA meeting, uh, by urine now. And so, in theory, in that meeting to you guys, what would be the realistic quote, unquote, worst case scenario that can arise from that meeting?

Mike Exton: Yeah, thank you, Andrew. It's Craig. I can answer your question. I mean, it actually is validating hearing other companies talk about what their pain program phase 3 approaches in DPMP are. And as you recall, we have already met with the FDA on this program. And I think their feedback is going to be very similar to what we've already heard from them. And I think what other companies have also acknowledged is that you're going to need two parallel studies in the lead indication for neuropathic pain. And it is highly unlikely that with a single indication or a single study in two indications that you could get a broad neuropathic pain indication. That was always our expectation. That was affirmed by the FDA. That was affirmed in our ad board. And I think it's been affirmed by other companies that are out there.

Yeah, thank you, Andrew. It's, uh, Craig, I, I can answer your question. I mean,

it actually is validating hearing other companies, talk about what their pain program, phase 3 um approaches in DPN PR

And as you recall, we we have already met with the FDA on this program.

And I think their feedback is going to be very similar to what we've already heard from them. And I think what other companies have also acknowledged is that you're going to need 2 parallel studies in the lead indication for neuropathic pain and it it is highly unlikely that was a single indication or a single study in 2 cases that you could get a broad neuropathic pain indication. That was always our expectation. That was affirmed by the FDA that was affirmed in our ad board. And I think

Mike Exton: So, when you think about the timing of our program and the magnitude of our program, I think it remains pretty much unchanged to what it was. It would be two parallel trials in DPMP, potentially with different geographies or slightly different designs, but primarily the same primary endpoint of a pain score at week 12. And I think based on all the data we've seen across the totality of our program, we think that the size of those studies to appropriately power them is very similar to what we've already been communicating to you of two arm studies of roughly 600 patients each with a single active arm and a placebo-controlled arm.

It's been a firm by other companies that are out there.

So, when you think about the timing of our program and the magnitude of our program, I I think it remains pretty much unchanged to what it was. It would be 2, parallel, trials, in dpnp potentially with different geographies, or slightly different designs, but primarily the same sign primary endpoint,

Of a, a neuropath pain score, at week 12.

Speaker 5: Thank you.

Um and I think based on all the data we've seen across the totality of our program. We think that the magnets, the size of those studies to appropriately power them is very similar to what we've already been communicating to you. Of 2, 2 arm studies of roughly 600 patients each with a single active arm and a placebo control arm.

Thank you.

Lisa DeFrancesco: Thank you. Our next question comes from Caroline Dupont with CITI. You may proceed.

Thank you.

Our next question comes from Caroline deal with City. You may proceed.

Speaker 5: Hi, this is Caroline Ahn for Yugal and Nothamovitz. So, we'd like to know, what is Novo's plan for the phase 1 in obesity? Are there plans to combine with GLP-1?

Hi. This is Caroline on for your gall not to move it. Um so we'd like to know what is novo's plan for the phase 1 and obesity are there plans to combine with glp1?

Mike Exton: Yeah, I think in our discussions with Novo, and I really want to thank our entire team for really having a great collaboration with Novo, I think as you've heard in the marketplace and I think you've seen from both Lilly and Novo and other companies that the market is going to be moving towards oral options and combination options. And I think the data that we've already demonstrated and that presented on the use of 9851 as an oral once-daily agent or the expectation of that, both with semaglutide and other agents that are being studied in development for weight loss and the potential for triple combinations. And I think you've seen other companies talking about moving both to oral and triple combinations. I think 9851 is really rightly positioned to be a part of that set of development programs.

Yeah I think um you know what you know our discussions with Novo and I really wanted to thank our entire team for really having a a great collaboration with with Novo

Mike Exton: If I could just provide one comment over the top of that. You know, we've been really blessed with both of our partners, with our licensees, with Beatrice and Novo Nordisk. The enthusiasm and capabilities that they bring to bear for both of these assets are really stellar. And although obviously Novo is undergoing some changes at the moment, our engagement and interaction and their enthusiasm and drive for this asset is unbridled, so to speak. It's really incredible to see the team in action. And we expect that Novo will attack the phase 1 program with vigor shortly after the I&D.

I I think as you've, you've heard in the marketplace and I think you've seen from both um, Lily and Novo and other companies that the market is going to be moving towards oral options and combination options. And I think the data that we've already demonstrated and that presented on the use of 9851 as an oral 1 Daly agent or the expectation of that both with semaglutide and other agents that are being studied in development for weight loss and the potential for triple combinations and I think you've seen other companies, talking about moving, both to oral, and triple combinations. Uh, I think 9851 is, is really write rightly positioned to be a part of that, uh, set of development programs.

If I could just provide 1 comment over the top of that. Um, you know, we've been really blessed with both of our partners, uh, with our licenses, with Vitus and over nautis the enthusiasm and capabilities that they bring to bear for, uh, both of these assets are are really Stellar, uh, and although, obviously Novo is undergoing some changes at the moment, our engagement and interaction and their enthusiasm and drive for this asset is um unbridled so to speak. It's uh, it's really incredible to see the team in action and uh we expect that Novo will uh attack the phase 1 program with Vigor um shortly after

Uh, the the IND.

Lisa DeFrancesco: Thank you. Our next question comes from Joe Pankins with HE RAIN. Right, you may proceed.

Thank you.

Speaker 6: Hey, everybody. Good morning. Thanks for taking the questions. A couple, if you don't mind, first, it's a housekeeping question. With regard to the OPEX guidance, does this include or not include stock-based compensation?

Our next question comes from Joe pan. Goodness with at rain, right? You may proceed.

Hey everybody. Good morning. Thanks for taking the questions. Um, couple if you don't mind first is a housekeeping question with regard to the Opex guidance. Um, does this include or not include stock-based compensation.

Mike Exton: It does include stock-based compensation.

Speaker 6: Great, thank you. And then, you know, a couple of comments here that have been coming up about the end of phase 2 meeting for pilocarpine. Just curious how you feel, you know, that that's still on track, but more specifically, do you feel this is the ultimate rate-limiting step for your partnering plans?

Thank you. Um and then you know a couple of comments here that have been coming up about the end of phase 2 meeting for pill of Aidan. Um just curious how you feel you know that that's still on track but more specifically. Do you feel? This is the ultimate rate limiting step um for your partner partnering plans.

Mike Exton: I don't think it's a rate-limiting step, Joe. I think what has been our approach here is have the initial round of discussions with partners with the top line, helping them understand. And now, two important things have happened. We have, A, completed the secondary analyses from progress or three important things, I would say. Completed the secondary analysis where bringing the totality of the phase 2 program data to bear so that we understand the totality of evidence. And most importantly, or perhaps most importantly, we've convened the scientific advisory board. And you know, we won't sort of go into who the people were, the members of that advisory board, but I can assure you these are the top, top people that have been involved in this space from a regulatory development and mechanistic perspective for some time.

Mike Exton: And having their endorsement of, as we theorized all along straight from the top line of 10 milligrams being the appropriate dose to move forward into phase 3 really gives us confidence not only internally, but to re-engage in those discussions and start to progress the discussions to a more concrete basis over the coming months. I think how we approach the end of phase 2 meeting will be sort of dependent on now the engagement from partners around whether they want to be a part of that, whether they want to sort of see the outcome and move forward. But we're progressing that at speed.

I don't think it's a right limiting step Joe. Um, I think what has been, uh, our approach here is, uh, have the initial round of discussions with, um, partners with the Top Line, helping them understand. Uh, and now 2, important things have happened. We have a completed, the secondary analyses from progress or 3 3 important things I would say completed the secondary analysis where bringing the totality of the phase 2 program data to bear, so that we understand the totality of evidence. Uh, and most importantly, uh, or perhaps most importantly, we've convened, the scientific Advisory Board and, you know, uh, we won't sort of go into who the people were the members of that Advisory board but I can assure you, these are the top top people that have been involved in this space from a regulatory uh, development and and mechanistic perspective for for some time. And having their endorsement uh of

Speaker 6: Totally fair. Thanks. And then just quickly on HCM, I don't know if Craig would want to give any color on this. I think it's been a pretty impressive ramp on the number of sites that you have. So, just curious, as you're looking to really ramp up enrollment as well, are there any comments from the field with regard to, you know, views towards CMI or CMI competition for patients or what have you, even though you know you have a different profile of where SOTA might fit?

As we uh, theorized all along straight from the top line of 10 milligrams, being the appropriate dose to move forward in the phase 3, we really gives us confidence not only internally, but to re-engage, uh, in those discussions and start to, to progress the discussions to a to a more concrete, uh, basis over the coming months, I think how we approach the end of phase 2 meeting will be sort of dependent on now the engagement from Partners around, whether they want to be a part of that whether they want to sort of see the outcome and and move forward. Um, but uh, where where progressing that, um, at speed

Mike Exton: Yeah, great question, Joe. I'll answer that sort of in two very different ways. The first is that we have this open window of enrollment. There are no active ongoing registrational trials now in HCM. And the fact that Odyssey ended, in a sense, without a long-term extension, you know, there's a fair runoff period in that trial from what we understand. But those patients are also available with no treatment options. So, you know, we really have a nice golden opportunity here from an enrollment standpoint as you have a lot of sites with available patients that are symptomatic, both obstructive and non-obstructive, whether they're on a CMI or not, that can be included in the trial. So, in that regard, I think that's been a real upside.

Totally fair. Thanks. And then, just quickly on HCM, I don't know if Craig would want to give any color on this. Um, I think it's been a pretty impressive, uh, ramp on the number of sites that you have. So, just curious as you're looking to really ramp up enrollment as well, are there any comments from the field with regard to, you know, views towards CMI or CMI competition for patients or what have you even though you know you have a different profile of where um soda might fit

Yeah, great question Joe. I'll I'll answer that sort of in in 2 very different ways. The first is

The we have this open window of enrollment, there are no active ongoing, registrational trials. Now in HCM,

And the fact that Odyssey ended in a sense without a long-term extension, you know, there's a fair runoff period in that trial from what we understand but those patients are also available with no treatment options.

So you know we really have a a nice golden opportunity here from an enrollment standpoint as you have a lot of sites with available patients that are symptomatic, both obstructive and non-obstructive when they're on a CMI or not.

That can be included in the trial. So in that regard,

Mike Exton: The interesting aspect actually when you think about enrollment, and I think this is what you're seeing already with some of the companies that are marketing products in obstructive HCM, is there seems to be a speed limit in the capacity of the field to start new patients on CMIs because of the echoes. And while we do not require multiple echoes during treatment, unlike the CMI studies or CMIs themselves, we do require a baseline echo. So, scheduling echoes is an issue for enrollment, at least in the US. So, you know, it is interesting to see that flow through from the commercial market.

I think that's been a a real upside. The the interesting aspect actually when you think about enrollment and I think this is what you're seeing already. With some of the companies that are marketing products in obstructive HCM, is there seems to be a speed limit.

In the capacity of the field to start new patients on cmis because of the echoes.

Mike Exton: In the US, I would say the very early enrollment, and again, we're just looking at blinded data, but we know that whether patients are obstructive or non-obstructive, there are more non-obstructive patients being enrolled currently in the US than obstructive, which is to be expected because one of the CMIs is already approved and on the market in the US. So, there are no options available at all for the non-obstructive. So, in the US, we're seeing more non-obstructive than obstructives, but we think that's going to rapidly shift ex-US because the CMIs are largely not available outside the US. And. Joe, what I hear over the last sort of three to six months speaking with KOLs is a couple of things. One, they're becoming more and more aware of SOTA in HCM. I think that's twofold. One, we're progressing SONATA and, you know, that enrollment is going nicely.

And while we do not require multiple Echoes during treatment, unlike the CMI studies or cmis themselves, we do require a baseline Echo. So scheduling Echoes, um, is a is an issue for enrollment at least in, in the US. So, you know, it, it is interesting to see that flow through from the the commercial Market. Um, in the US I would say the ear very early enrollment,

Uh and again we're just looking at blinded data, but we know that where the patients are obstructive or non-obstructive. There are more non-obstructive patients being enrolled currently in the US than obstructive, which is to be expected. Because the CM, you know, uh, 1 of the CMI is already approved and on the market in the US. So there are no options available at all for the non-obstructive. So in the US,

Mike Exton: And two, there's obviously been noise in the marketplace, particularly around non-obstructive and conjecture around, you know, will APPICAMPTEN be successful? But they see because of some of the other evidence that we have with SONATA that this could be a real option for non-obstructive. So, they're enthused about the possibility of that. And then, you know, more broadly, sort of having worked in this space with Entresto and understanding that general cardiology practices across the country have HCM patients, have HFpEF patients, and the potential to have one medicine that can potentially treat both very significantly without sort of fear or favor. And is really compelling beyond the academic sites into the general cardiology practices where, as you know, actually the vast majority of HCM patients are being treated.

Uh, you know that enrollment is is going nicely and 2. There's obviously been noise in the marketplace particularly around non-obstructive and conjecture around, you know, will AIC Campton be successful. But they see because of, uh, some of the the other evidence that we have with Sonata that this could be a real option for non-obstructive. So they're enthused about the possibility of that. And then you know more broadly sort of having worked in this space within tresto and understanding the

Speaker 6: Appreciate it. Thanks a lot.

General Cardiology practices across the country uh have HCM patients have heft patients uh and the potential to have 1 medicine that can potentially treat both very significantly without sort of fear or nor favor and uh is is really compelling beyond the academic sites into the general Cardiology practices whereas you know actually the vast majority of HCM patients are are being treated.

Appreciate it. Thanks a lot.

Lisa DeFrancesco: Thank you. And as a reminder, to ask a question, please press star 1-1 on your telephone. One moment for questions. Our next question comes from Mazaheer Ali Mohammed with LEARING partners. You may proceed.

Thank you. And as a reminder to ask a question. Please press star, 1 1 1 on your telephone,

1 moment for questions.

Our next question comes from mother here Ali, Muhammad with Ling Partners. You may proceed.

Speaker 5: Yep. Hi, everyone. This is Maisie Ahn for Rellana. Just two from us, but I guess the first one is, given Vertex's recent announcement about their VX-993 and its inability to meet its primary endpoint in the phase 2, how does that, I guess, impact your confidence in the overall pain market and the ability to conduct a careful phase 3 trial? And then I guess the second one, Craig, just to follow up to what you just said. So, I noticed that you mentioned that there's going to be an echo for every patient when they start the trial. Is that something that you would expect if approved as well into the market? Would it be something that you would expect commercially that they would have an echo before being started on the drug?

Yep. Hi everyone. This is Maisie on for rowana. Um just uh 2 from us but I guess the first 1 is uh given vertex is recent announcement about their um, vx9 93. And it uh, inability to meet its primary endpoint in the phase 2. How does that?

I guess impact your confidence in the overall pain market and the ability to um, conduct a

A careful phase 3 trial and then I guess the second 1, Click, or just to follow up to what you just said. So I noticed that you mentioned that this is going to be an echo for every patient when they start the trial is that something that you would expect if approved as well. Uh, and to the market would it be something that you would expect commercially that they would have a echo before being started on drug?

Mike Exton: Yeah, great couple of questions. And please pass on our best regards to Rellana. I hope it's all going well with the above. Let me take a first go with the pain question and Vertex. And obviously, we followed their earnings yesterday. I think, in fact, that gives us even greater confidence in our own program. Why is that? You know, we've now shown three times across phase 2 programs in neuropathic pain that we can separate from placebo with a 10 milligram dose. We, I think, have always been a little bit skeptical of NAV 1.8, particularly in neuropathic pain. I think the evidence in acute pain, despite 993's results yesterday in post-bunionectomy, are not reading out positively.

Yeah, great couple of questions and please pass on our best regards to an. I hope it's all going well with the bub. Um, Let me let me take a first go with the, the pain question and and vertex. And obviously, we followed the the earnings yesterday. Um, I think in

that gives us even greater confidence in our own program. Why is that? You know, we've now shown 3 times in across Phase 2, uh, programs in in neuropathic pain that we can separate from Placebo with the 10 milligram dose, uh, we, I think have always been a little bit skeptical of nav, 1.8, particularly in Europe.

Mike Exton: So, it allows us confidence in our program and having a novel mechanism of action compared to the number of companies that are now pursuing NAVs, which, you know, really, the evidence is mixed, one would have to say, apart from acute. But certainly, in neuropathic pain, the evidence is mixed at best. And actually, it's probably pretty much not great, so to speak. And it's one of those instances where being on a novel MOA with proven efficacy really, we think, is something that we appreciate and gives us confidence moving forward. And importantly, partners will appreciate as we sort of go back and have this next round of discussions. So, Craig, any other thoughts on that?

Traffic time. Uh, I think the evidence in acute pain. Despite, you know, 993, uh, results yesterday in post bunionectomy are not reading our positively, uh, so it, it allows us confidence in our program, uh, and having a novel mechanism of action, compared to the number of companies that are now pursuing navs, which, you know, really the the evidence is mixed. 1 would have to say apart from acute but certainly in neuropathic pain the evidence is mixed at best and actually it's probably pretty much uh

Lisa DeFrancesco: Yeah, Mike, I think that was well said. I think just scientifically, there are a couple of important points. And again, I don't want to draw undue attention to another company's communications, but they did demonstrate or they communicated that with 993, they did get more exposure with more dose, and they had no additional efficacy. So, I think that the question is, there is certainly a feeling on the effect of NAV 1.7 to mitigate pain. I think that's also reflective of the fact that they're looking at developing combinations of NAV 1.7 and 1.8, which presupposes that they're looking for more efficacy. So, I think that's an important point. And as Mike said, in neuropathic pain, the NAVs have not demonstrated separation from placebo. They've demonstrated similar drops in pain score compared to pregabalin.

Uh, not not great, uh, so to speak. Um, and it's 1 of those instances where being on a novel MOA, with proven efficacy, really? We think is something that we appreciate and give us confidence. Moving forward, uh, and importantly, uh, Partners will appreciate as we sort of go back and have this next round of discussions. So Craig and any other thoughts on on that. Yeah, Mike, I think that was well said, I think just scientifically there are a couple of important points. And again, I don't want to, um, draw undue attention to another company's Communications, but they did demonstrate or they communicated that with 993, they did get more exposure with more dose and they had no additional efficacy.

so I think that the question is there is certainly a Feeling

On the effect of NAV, 1.7 to mitigate pain.

Um, I think that's also reflective of the fact that they're looking at developing combinations of nav 1.7 and 1.8, which presupposes, that they're looking for more efficacy.

Uh, so I think that's an important point. And as Mike said,

In neuropathic pain. Um, the navs have not demonstrated separation from Placebo.

Lisa DeFrancesco: But as we know, pregabalin doesn't always separate from placebo in the pregabalin registration trials. And that's the whole issue around placebo effect. So, I think those are just a couple of additional comments. And I think it also reaffirms from a regulatory standpoint that you're going to need to do two separate trials in a pain indication to seek approval. And so, again, I think those were some important findings that we had from what we heard the other day. Switching gears on the echo, you know, I don't think that's going to be a major impediment. All these patients are going to be getting an echo regardless. I think a lot of the issues in HCM, frankly, are related to the echoes because of the fact that CMIs reduce ejection fraction. So, I think we don't have that issue, right?

They've demonstrated similar drops in pain score compared to pregabalin, but as we know, pabalan doesn't always separate from Placebo in the pregabalin registration trials, and that's the whole issue around placebo effect.

Trials in a pain indication to seek approval and so again, I think those are some important findings that that we had from what we heard the other day.

Um, Switching gears on the echo.

You know, I don't think that's going to be a major impediment. All these patients are going to be getting an echo regardless. Um, I think a lot of the issues in ATM. Frankly are related to The Echoes because of the fact that cmis reduce ejection fraction,

Lisa DeFrancesco: We're a drug that treats heart failure, whether you have low ejection fraction heart failure or normal ejection fraction heart failure. I think part of what's going on in the HCM field has been modified by the level of the agents and the fact that the current agents that have either been approved or under study actually have a negative ionotropic effect on the heart by their very design. And because of that, getting an echo and following ejection fraction closely is a very important safety signal, which is the basis of the REMS that exist. So, I think FDA will probably label our drug the way that we studied it, that there'll be an echo.

So I think we don't have that issue, right? We're a drug that treats heart failure, whether you have low ejection fraction heart failure or normal ejection fraction heart failure. I think part of what's going on.

In the HCM field has been modified by the level of the agents and the fact that the current agents that have either been approved or under study, actually have a negative ionotropic effect on the Heart by their very design. And because of that getting an echo and following ejection fraction closely is a very important safety signal, which is the basis of the rims that exist.

Lisa DeFrancesco: But I think that the requirement or the necessity of the echo from a patient suitability standpoint might be less with SOTA, even though following the echo and following ejection fraction in patients with symptomatic heart failure is sort of standard of care today anyways, at least in the United States.

So I think the FDA will probably label our drugs. The way that we studied it, I think there'll be an echo, but I think that the requirement or the necessity of the echo.

From a, a patient to suitability standpoint might be less with soda, even though following the Echo and following ejection fraction in patients, with symptomatic, heart failure, sort of standard of care today. Anyways, at least in the United States.

Speaker 6: Great. Thank you, guys.

Great. Thank you guys.

Lisa DeFrancesco: Thank you. I would now like to turn the call back over to Mike Exton for any closing remarks.

Thank you. I would now like to turn the call back over to Mike X. And for any closing remarks

Mike Exton: Yeah, well, thanks very much for joining, everyone. And thanks for the questions, folks. I really appreciate those. So, you know, I've done a number of these quarterly earnings calls since I've been here. And the last couple, we've had some major announcements with data readouts, with a refocus on strategy. And all of those have been very important announcements. But I think so far in my short tenure here, this is probably the quarter that I'm most proud of, mostly because of two things. One, that the team has really driven all programs in parallel to the point of their next stage of catalyst, to their next sort of inflection point, to their next natural development. And importantly, we've done so in a way where we have really focused our resources and are allocating capital in a way that's really focused on adding value for us and all stakeholders.

Yeah. Well, thanks very much for joining everyone and, um, thanks for the questions folks, I really appreciate those

So you know, I've done a number of these quarterly earnings calls since I've been here. Uh, and the last couple we've had some, some major announcements with data readouts with uh, a refocus on strategy. Um, and all of those have been very important announcements. But, uh, I think so far in my short tenure here, this is probably the quarter that I'm most proud of uh, mostly because of 2 things, 1.

That the team has really driven all programs in parallel to the point of their next stage of catalyst, to their next sort of inflection point to their to their, um, next natural development. Uh, and importantly we've done. So, in a way where we've really focused our resources and are allocating capital in a way that's really focused on adding value.

Mike Exton: So, both of those things have resulted in a quarter where the pipeline has advanced dramatically. And we've done so revising the outlook for expenses for the year, mostly because of 9851, but some of it due just to looking at all of our expenses and making sure we're spending wisely. So, I couldn't be prouder of the team. Looking forward to Q3 as we go through a number of important developments over the next three months and updating you all then. So, thanks very much.

Value for us and all stakeholders. So, both of those things have resulted in a quarter where the pipeline has advanced dramatically, uh, and we've done so revising, um, the uh, the outlook for expenses, for the year mostly because of 9851. But some of it due, just to looking at all of our, uh, expenses and making sure we're spending wisely. So I couldn't be prouder of the team. Looking forward to Q3 as we go through a number of important developments over the next 3 months, uh, and updating you all then. So, thanks very much.

Lisa DeFrancesco: Thank you. This concludes the conference. Thank you for your participation. We may now

Thank you, this concludes the conference. Thank you for your participation. You may now disconnect