Lexicon to settle up with Symphony as it aims for early 2017 FDA approval


Lexicon Pharmaceuticals ($LXRX) set up an external R&D vehicle almost a decade ago known as Symphony Icon. The biotech is now heading into an FDA decision on its first-and-only potential approved drug that was developed under that vehicle.

The Texas-based company opted to repurchase Symphony Icon in 2010, but has now made arrangements to pay its final obligations to Symphony Icon upon an FDA approval of telotristat ethyl to treat carcinoid syndrome. It will pay $21 million, a reduced amount from the $29.6 million due under the buyout agreement. The payment will be 50/50 in cash and Lexicon stock.

Telotristat ethyl to treat carcinoid syndrome is Lexicon’s only clinical program that resulted from Symphony Icon. Lexicon partnered with Ipsen in 2014, giving it rights to the candidate in Europe and other ex-U.S. countries, but the biotech retains U.S. and Japan commercial rights.

The FDA review date for serotonin inhibitor telotristat ethyl is February 28, which was delayed from Nov. 30 in September. The candidate targets tryptophan hydroxylase, an enzyme that triggers the excess serotonin production within mNET cells that is a key driver of carcinoid syndrome.

Existing treatments work to reduce the release of serotonin outside tumor cells, while telotristat ethyl is focused on that process within the tumor cells.

“With telotristat what we're very excited about is that it could be the first non-SSA for carcinoid syndrome in market, and it could be upon a successful NDA, the first new technology in 18 years in the market of carcinoid syndrome,” said Lexicon President and CEO Lonnel Coats on a September conference call. It’s expected to be used in combination with the current standard of care, somatostatin analogue (SSA) therapy.

Its only other clinical candidate is sotagliflozin, which recently had positive Phase III data to treat Type 1 diabetes. It is partnered with Sanofi ($SNY) under a deal worth up to $1.7 billion.

Lexicon has a market cap of almost $1.9 billion; it has raised more than $1.3 billion in equity since inception with another $783 million in cash coming in from collaborations.

Hedge fund Invus holds more than 55% of Lexicon, a controlling interest, according to data from the end of last quarter. Fidelity Management also held 15% of the company at the end of June.