Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q3 2024 Earnings Call Transcript

Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Q3 2024 Earnings Call Transcript November 12, 2024

Operator: Good day, and welcome to the Lexicon Pharmaceuticals Third Quarter 2024 Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Lisa DeFrancesco, Head of Investor Relations and Corporate Communications. Please go ahead.

Lisa DeFrancesco: Thank you, Dave. Good afternoon, and welcome to the Lexicon Pharmaceuticals third quarter 2024 financial results conference call. Joining me today are Dr. Mike Exton, Lexicon’s Chief Executive Officer and Director; Tom Garner, Senior Vice President and Chief Commercial Officer; Dr. Craig Granowitz, Senior Vice President and Chief Medical Officer; and Dr. Alan Main, Executive Vice President, Innovation and Chemical Sciences. Earlier this afternoon, Lexicon issued a press release announcing our financial results for the third quarter of 2024, which is available on our website at www.lexiconpharma.com and through our SEC filing. A webcast of this call, along with a slide presentation, is also available on our website.

During this call, we will review the information provided in the release, provide a corporate update, and then use the remainder of our time to answer your questions. Before we begin, let me remind you that we will be making forward-looking statements, including statements related to the safety, efficacy, clinical development, regulatory status, and therapeutic and commercial potential of INPEFA, ZYNQUISTA, LX9211, LX9851, and our other drug programs, as well as our business generally. These statements may also include characterizations and projections relating to our commercial launch of INPEFA in heart failure, as well as the clinical development, regulatory status, and market opportunity for all of our drug programs. This call may also contain forward-looking statements relating to our growth and future operating results, discovering development of our drug candidates, strategic alliances, and intellectual property, as well as other matters that are not historical facts or information.

Various risks may cause our actual results to differ materially from those expressed or implied in such forward-looking statements. 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 Exton: Thanks, Lisa, and good day, everyone. Thanks for joining us on the call. Before we begin our discussion on Lexicon’s results and business update for the third quarter of 2024, I’d like to discuss the progress we’ve made throughout this year, specifically over the last quarter, where there have been a considerable number of important achievements. Summarizing just the last few months, we’ve completed the resubmission of our NDA for ZYNQUISTA for glycemic control in people with type 1 diabetes and chronic kidney disease. The FDA held an advisory committee meeting for our NDA on October 31, and we’re continuing to work toward the PDUFA goal date of December 20 of this year. We’re planning for multiple outcome scenarios as we approach the PDUFA date in a few weeks.

We also completed a strategic repositioning and continued focus promotion of INPEFA to targeted high prescribers. Furthermore, we have two major assets undergoing late stage clinical development, and we’re making excellent progress in the development of both. A Phase 3 study for sotagliflozin in hypertrophic cardiomyopathy, or HCM, is underway and the study is making good progress in sites open and enrolling patients. A Phase 2b study for LX9211 in diabetic peripheral neuropathic pain, or DPNP, has crossed a big milestone by completing enrollment screening earlier than anticipated. Now we anticipate top line data in the first quarter of 2025. From our earlier clinical pipeline, we’ve made progress with our exciting novel drug candidate LX9851, an oral therapy with IND-enabling studies underway for obesity and associated cardiometabolic disorders.

Lastly, we’re able to share important data on this asset at Obesity Week. We believe LX9851 has the potential to become an innovative next generation treatment in this, and we also know, booming and yet evolving market. And lastly, but importantly, we’ve taken steps to reinvigorate our business development efforts with a substantial near-term focus on partnering. One result of these efforts was the recent exclusive licensing agreement we completed for sotagliflozin outside of the U.S. and Europe with Viatris, a company with strong cardiometabolic expertise and a successful track record of commercializing medicines. So I’m going to begin our business overview today by sharing an update on ZYNQUISTA, following our recent AdCom. The committee voted 11 to 3 that the benefits of ZYNQUISTA do not outweigh the risks in adults with T1D and CKD, as defined by Lexicon as the T1D CKD population in the primary voting question.

Now, importantly, following the vote of the initial population, there are additional robust discussions surrounding the benefit risks of ZYNQUISTA in the 60 to 90 population, which was predefined and discussed at length during both the Lexicon and FDA presentations. As a part of the discussion, additional committee members expressed support for sotagliflozin in this subpopulation where they believe the benefits potentially outweigh the risks. Indeed, we saw an overwhelming outpouring of support, reflective of the unmet need that exists in this population. The meeting was widely attended by patient communities, advocates and healthcare professionals, and included 23 presentations shared during the public hearing, and a total of 148 submissions to the MDAC [ph] docket.

Though there have been few advancements in insulin and CGM technology, the vast majority of people with T1D struggle to maintain glycemic control. Glycemic control is especially critical in the higher risk population of people with both T1D and CKD to slow the progression of kidney disease, heart failure and death. Though the Lexicon team remains hard at work towards our PDUFA date of December 20, and while we work towards the PDUFA date and remain committed to launch readiness in order to bring ZYNQUISTA to patients if approved, we’re vigilant about our cash position and spending. Accordingly, we’re preparing for all PDUFA outcome scenarios, with each plan mindful of both cash and focusing resources on the opportunities provided by our strong pipeline.

Presently, we’ve paused any new spending related to launch preparation, until we have more clarity on the path forward. However, in the event that we do have a successful outcome at PDUFA, our goal is to make ZYNQUISTA available to the appropriate patients as quickly as possible, and as early as the first quarter of 2025. We’ve done a significant amount of planning in preparation for this launch, and have a number of key tailwinds, including an established supply chain and manufacturing capabilities ready to scale, given our prior launch of sotagliflozin, as INPEFA for heart failure, proven commercial leadership expertise and a highly experienced team, with significant launch experience, and operating in a highly concentrated market, know that 80% of people with T1D and CKD are treated by a concentrated group of approximately 4,000 endocrinologists, which will allow us the opportunity to have a significant impact with our existing field team.

And most importantly, ZYNQUISTA has the potential to be the first and only adjunct therapy to insulin for glycemic control. There’s been a dearth of innovation for this patient population, despite the significant need, and we believe ZYNQUISTA could satisfy a strong pent-up demand, if and when we align with the FDA on the right patient population to benefit from this therapy. So moving on now next to briefly discuss INPEFA for heart failure. Net sales for the third quarter of 2024 were $1.7 million, which represents 8% quarter-on-quarter growth, yielding $4.5 million year-to-date for 2024. Through Q3, we saw improvements in filled TRx volumes across both commercially insured and Medicare patients, with gross unit volume increasing by 26%, driven predominantly by increased depth of prescribing among the growing base and repeat INPEFA prescribers.

This progress continues to be driven by the focused efforts of our sales team, even with the strategic repositioning that included a 50% reduction in field force, which was effective in September. Continuing with the discussion of sotagliflozin, which remains a pipeline and appeal opportunity for Lexicon, we have made significant progress in our clinical development strategy for patients with symptomatic HCM. Enrollment is now underway for SONATA HCM, a pivotal Phase 3 placebo-controlled study, with a targeted enrollment of 500 patients with obstructive or non-obstructive HCM. The primary endpoint of the study is change from baseline in KCCQ score, an endpoint that has been accepted by the FDA as the primary endpoint in this and other label-enabling HCM trials, and with which we’ve previously achieved success in our SOLOIST heart failure trial.

Importantly, SONATA HCM is studying a broader patient population than that studied in other ongoing trials in HCM, as we allow patients to be on cardiac myosin inhibitors, as well as allowing the use of beta blockers and calcium channel blockers. If approved, this clinical approach would potentially enable broad adoption and ease of use, as there would be no need necessarily to change the current treatment regimen. We’ve obtained feedback from the FDA that success in this single study could support a broad label for sotagliflozin in HCM. Once again, this fits our Lead to Succeed strategy as an important area of growing unmet need where we have the potential to be the only indicated SGLT inhibitor. Current estimates suggest that approximately one million patients in the U.S. today have HCM.

Many are not diagnosed, in part given the non-specific nature of HCM symptoms, but diagnostic rates have been rising rapidly, a trend which is expected to continue over the next decade with increased awareness and understanding of this disease. Looking further into our pipeline, I really want to spend some time today on LX9211, as we’re near the finish line of our Phase 2b study. LX9211 is another pipeline and appeal opportunity for Lexicon, with what we believe to be a multi-blockbuster potential across numerous possible therapeutic applications in important areas of need. These include diabetic peripheral neuropathic pain, which is currently under evaluation, but also in other forms of neuropathic pain, such as post-hepatic neuralgia and potentially in forms of spasticity.

LX9211 offers the opportunity to potentially redefine the standard of care in DPNP. Targeting the enzyme AAK1, LX9211 is a non-opioid medication and has the potential to be the first new oral treatment for neuropathic pain in more than two decades. LX9211 has received, excuse me, fast-track designation from the FDA for development in DPNP. So as you can tell, we’re really excited about the potential of this program. And our progress Phase 2b dose optimization study completed screening for enrollment this past quarter. That’s significantly ahead of schedule. We now anticipate top-line data in the first quarter of 2025, so that’s really right around the corner for us. We believe this study was really well designed. Like our previous proof-of-concept study, it’s placebo-controlled, allows patients to remain on a stable dose of standard of care therapy rather than removing all pain medications.

That’s really consistent with how novel DPNP drugs are likely to be used in real-world practice. There are approximately 20 million patients in the U.S. suffering from neuropathic pain and about 5 million of those have diabetic peripheral neuropathic pain. So if approved, we believe that LX9211 could offer real benefit to patients and to the clinical community who are looking for better options to improve outcomes for patients with various types of neuropathic pain. So we’re really looking forward to these results. The protocol of the study was also designed to find the correct dose and to optimize the Phase 3 program both in terms of length and overall study size. So while Lexicon is well positioned to continue the clinical development for DPNP, we’ve been actively discussing potential partnerships to realize the full value and potential for this asset.

Our newest drug candidate is LX9851, a novel compound currently in preclinical studies for obesity and associated metabolic disorders. We believe that LX9851 has the potential, like our other assets, to be developed in additional indications and to be used as a potential combination therapy. LX9851 is a small molecule inhibitor of the novel target ACSL5, an enzyme that is highly expressed in the intestinal mucosa. Its unique ileal break mechanism appears to provide benefit versus known limitations of GLP1s, such as lean muscle loss, dose-related adverse GI side effects, and weight rebound post-discontinuation. We believe 9851 could be given orally for chronic weight management, alone or in combination with incretin mechanisms, with a target product profile that reduces body fat and improves overall metabolic profile.

On the next couple of slides here, I’d like to show some preclinical data which was presented last week at Obesity Week. The first slide shows the significant reduction in body weight observed with Diet-Induced Obese, or DIO, mice that are high-fat diet. Notably, the addition of LX9851 to semaglutide resulted in significantly greater weight loss than that achieved by semaglutide alone. Furthermore, we also presented data on what happens to weight loss if semaglutide is discontinued and then LX9851 treatment is initiated. Here you’ll see the blue line that shows weight loss associated with administration of semaglutide. Importantly, when semaglutide treatment is withdrawn after day 14, it quickly rebounds back to baseline. If, however, LX9851 treatment commences upon semaglutide discontinuation, the green line shows how weight loss is substantially maintained.

Look, we’re really enthused about the promise of these early results and other preclinical data we’ve generated demonstrating improvements in cholesterol, triglycerides, and insulin sensitivity, which may give way for additional related indications in metabolic syndrome and MASH. As we know, the obesity and weight management space is an area of tremendous interest in the industry, and we’re very excited about the potential for an oral therapy that complements and enhances current therapies alone or in combination. So we continue to advance our IND-enabling studies and are actively preparing for IND filing by mid-2025. So in summary, we’ve made really great progress across every one of our invested pipeline assets as we explore the potential applications of our novel unique products.

And we’re focused on making progress across the board on this pipeline in 2025. Let’s now touch on the financials for the quarter, and then I’ll talk a little bit more in depth about our partnering strategy. So we ended the quarter with $258.4 million in cash and investments, and that doesn’t include the upfront payment of $25 million that we received from the licensing agreement with Viatris, which was received in the fourth quarter. As indicated in our press release this afternoon, we had $1.8 million in revenues in the third quarter of ’24, almost all of that from net sales of INPEFA. R&D expenses for the third quarter of ’24 increased to 25.8 million from $17.6 million for the corresponding period of 2023. Now, that was primarily due to investments in our late-stage development programs, including the commencement of SONATA Phase 3 study of sotagliflozin in HCM and the earlier recognition of expenses related to the Progress Phase 2b due to the enrollment acceleration.

Selling general and administrative expenses for the third quarter increased to 39.6 million from 32.2 million for the corresponding period in 2023. That reflects higher marketing costs in conjunction with the commercialization of INPEFA and launch planning for ZYNQUISTA, as well as severance costs resulting from the strategic repositioning announced in August, which included a 50% reduction in the field force at that time. In total, net loss for the second quarter of 2024 was $64.8 million, or $0.18 a share, compared to a net loss of $50.5 million, or $0.21 a share, in the corresponding period of last year. For the third quarters of ’24 and ’23, net loss included non-cash stock-based compensation expense of $2.8 million and $3.9 million, respectively.

Now, let me just pivot and talk a little bit more about our strategy for partnering, which, as I mentioned earlier, is going to be a key value driver for Lexicon going forward. We’ve really reinvigorated our business development efforts over the last quarter, and that’s going to be a key part of our Lead to Succeed strategy moving forward. We have really three key priorities when it comes to evaluating partnership opportunities to create value. Augmenting our commercial capabilities, advancing our pipeline in any or all potential indications, and expanding access to new geographies or territories to deliver on the innate value of our products. Importantly, any partnerships would be a major source of non-dilutive capital to invest in our future.

A fantastic lead example of this strategy in action, we announced this quarter an exclusive licensing arrangement with Beatrice, a company with strong cardiometabolic expertise, a global commercial capability, and successful track record of launching medicines in new territories. This deal represents an exclusive opportunity to expand the reach of Soda to Flows and potentially across all indications to patients in other markets outside of the U.S. and outside of the EU. Now, as I mentioned earlier, the deal included a $25 million cash upfront payment and close to $200 million in potential regulatory and sales milestone payments, as well as tiered royalties from the low double digit to high teens. We’re excited to work with Beatrice, and even in these early weeks, they’ve already been an engaged and motivated partner.

We are confident that they are the right collaborator for Soda to Flows in these territories. With a renewed emphasis on BD, we’ve reshaped our BD team who are laser focused on our pipeline and potential near term partnering opportunities. Both LX9211 and LX9851 are focused in disease areas with proven or clearly articulated multi-blockbuster potential for new medicines. We continue our engagement with potential partners in this space, and they’re sharing important data as they progress. Importantly, we also now have a focused lead generation program against additional undisclosed targets from Genome5000 in preclinical validation within the cardiometabolic and neuroscience spaces. Look, 2024 has been transformative for Lexicon, and the next 12 to 18 months promises to be just as pivotal.

We have several important potential catalysts coming in the relatively near term. We’ll know for certain whether we have the ability to launch ZYNQUISTA in just a few short weeks. And as I stated earlier, we’re ready today for multiple scenarios. Our SONATA Phase 3 study of sodium fluorescent in HCM is well underway, and we look forward to continuing to enroll patients. We expect that our PROGRESS Phase 2b study of LX9211 in DPNP will report top line data in the early part of next year, which is coming very, very quickly. And the IND-enabling studies of LX9851 in the rapidly evolving area of obesity and associated cardiometabolic disorders are underway with an IND filing anticipated middle of next year. So each of these opportunities have large potential in areas of significant unmet need and clearly represent large commercial opportunities.

Any one of these is successful and has the potential to redefine Lexicon’s future and create significant value for stakeholders, including the patients that we are also committed to. Now, with that said, I’ll turn the call back to the operator and look forward to your questions.

Q&A Session

Operator: We will now begin the question-and-answer session. [Operator Instructions]. The first question comes from Andrew Tsai with Jeffries. Please go ahead.

Andrew Tsai: Hi, good afternoon. Thanks so much for taking my questions. I appreciate the updates. So after the AdCom, what would you guys say is your confidence that you will be getting a skinnier label within that 60 to 90 CKD subgroup? And is there anything you can do in the coming weeks, maybe sharing some more data or anything else to help convince the FDA to giving an approval? Thanks.

Mike Exton: Yes, great. Thanks, Andrew. I’ll let Craig comment initially.

Craig Granowitz: Yes, thanks, Andrew. We remain involved and engaged with the FDA after the MDEC process, and I think really at this point all we can say is that we’ve continued our engagement with them and we remain committed to the target date of December 20th. I think anything further at this point would be premature for us to comment on one way or the other. Thanks.

Mike Exton: As you do, I just recognize, Andrew, just to add a little bit of flavor, you know, both us and the FDA did call out the 60 to 90 group as a group that potentially may have improved benefit risk, and indeed that doesn’t represent a skinnier label. In fact, compared to the indication that we submitted in our briefing document, it represents a population about with another 15% to 20% of eligible CKD patients. So we don’t think that would represent a skinnier label and we’re going to continue to work with the FDA on potential scenarios.

Andrew Tsai: Yes. Thanks for the clarification. And then secondly, for the pain program, obviously the data is coming faster than what we had expected. So at the end of the day, are you expecting a larger placebo-adjusted efficacy separation that you saw in the prior Phase 2a, and why? Thanks.

Craig Granowitz: Yes, Andrew, it’s Craig Granowitz again, thank you for the question. And as we’ve mentioned, we always analyze our data not from a completer’s analysis standpoint, but on an intent-to-treat basis. I think if the data holds up and the percentage of patients that are completing the trial is greater than the dropout rates that we saw in the 201 study, the pilot study, you know, one might expect that the response rates might be greater, and certainly that’s what we’re hoping for, was to have a better efficacy safety profile. As I think as we’ve shared with you before, the dizziness signal we saw was really a C-max effect that was very much correlated to that initial handful loading dose on day one. And I think as we’ve shared in prior calls, what we’ve seen is that a very different profile, again, all blinded data, but a very different profile in the tolerability of treatment during this study.

So while I don’t want to overstate the case, again, analyzing the data on an intent-to-treat, not a completer’s analysis, the more drugs patients get in, assuming the drug is active, the more likely it is that we will see an enhancement of relative efficacy compared to placebo.

Andrew Tsai: Okay, that’s very encouraging. Thank you.

Craig Granowitz: Thanks, Andrew.

Operator: And the next question comes from Yasmeen Rahimi with Piper Sandler. Please go ahead.

Unidentified Analyst: Hey, team. This is Jung-Goo [ph] on for Yas. Thank you for taking our questions. For the pain program, could you comment on what types of data you’re privy to on a blinded basis across efficacy and safety? And secondly, is it reasonable to expect a dose response in the study as well?

Craig Granowitz: Yeah, so the data we get is extraordinarily limited, and again, it’s all blinded data, so we don’t know which patients are on drug or not on drug, and it’s really driven totally around safety. And we continue to monitor that because patient safety is obviously our most important priority, and we continue to do that on an ongoing basis regarding all the patients that are enrolled. So really all we can comment is the overall results in terms of dropouts and tolerability. So I really can’t say anything other than what I’ve already shared is that the profile in the blinded data seems to be somewhat different than what we saw in the pilot trial, and I think I really can’t comment more than that on the overall profile of the drug.

Unidentified Analyst: Got it. Thank you.

Operator: And the next question comes from Joseph Stringer with Needham and Company. Please go ahead.

Joseph Stringer: Hi. Thanks for taking our questions. Question on the Phase 3 HCM trial. Are you aligned with FDA on the KCCQ primary endpoint, and what would you consider a successful placebo-adjusted change in the KCCQ? Is there a bar for success here on this endpoint, the [indiscernible] data set?

Craig Granowitz: Yes, Joey, it’s Craig Granowitz again. We feel quite confident in this endpoint. We did have this discussion with the FDA prior to initiating the trial, both in terms of the endpoint, the magnitude of the benefit, the statistical plan, the powering of the study, the inclusion of both obstructive and non-obstructive in the relative numbers that are included in the trial. So all the parameters that we’ve shared previously on the trial design and endpoints, we feel quite confident in. We’ve not shared the overall expected KCCQ delta achieved in the trial, but as Mike mentioned in the prepared remarks, this is an endpoint that we feel quite confident we can reach based on what we’ve seen in the SOLOIST trial. And as a reminder, the inclusion criteria are for patients with symptomatic disease with a maximum KCCQ of 85 as the enrollment, which means the median is going to be somewhat lower than that.

So based on our prior experience, based on the fact that FDA has allowed approval of other studies as label-enabling studies that are running in non-obstructive HCM, we feel quite confident in the endpoint, as well as the expected outcomes using this instrument with sotaglifosin in a group of patients with symptomatic heart failure.

Joseph Stringer: Great. Thank you very much.

Operator: The next question comes from Joe Pantginis with H.C. Wainwright. Please go ahead.

Joe Pantginis: Hey, everybody. Good afternoon. Thanks for taking the questions. So I know Craig mentioned that you, I’m assuming you might be further restricted as to the comments around the AdCom, but just curious how much, like you said, obviously the FDA and you guys brought it up very well about the role of the more targeted population, but how much that may or may not be playing into your current FDA discussions. But more importantly, I’m sure one of the scenarios you’re looking at is, you know, if you do get another CRL and the FDA suggests another study in that defined population, are you prepared to do it yourself?

Mike Exton: Yeah. It’s a very intriguing and insightful question, as always, Joe. Look, I think at this stage, we’re going to await the results of the PDUFA, obviously, to make any concrete decisions. We’ve been in this game and pursuing with the FDA now over six years or so, and it will be very difficult to think about continuing, certainly to do more studies, when in fact we think we have a ton of evidence that we presented at the AdCom. And that would make it a difficult proposition to pursue further investments, when frankly it makes it difficult to have confidence that that would be sufficient. So never say never, but it would be a tough one. Craig, your thoughts?

Craig Granowitz: Yes, Joe, you know, I think we did have that specific discussion during the Q&A as some of the MDAC advisors asked us about that. I’ll just very, very briefly remind the group that we did three large independently blinded trials, all of which achieved the primary and all secondary endpoints. The 60 to 90 group was actually a predefined group prior to the initiation of the study, which we showed previously and again at the meeting that achieved statistical significance in all three of those trials. There was never a discussion at the advisory committee, did we achieve the endpoint, which was A1C reduction, or all of the key secondary endpoints, blood pressure control, weight management, time and range, reduction and level two hypo.

So, we felt at the time of the last CRL and particularly in this population, there’s no basis to have to re-run the efficacy trials. We think that has been definitively established as has the safety profile and the mitigation strategies that have been well adopted across the medical community of how to deal with diabetic ketoacidosis. And again, as a reminder, the diabetic ketoacidosis character in patients on an SGLT inhibitor is no different than those not on an SGLT inhibitor. The initiating factors for that are the same. The mitigation factors are the same. The recovery is the same. And as we reminded the MDAC, 50% of the patients, whether they were on drug or not on drug, restarted the therapy during treatment. So again, there’s no basis to run a study looking at mitigation of DKA based on these international consensus guidelines that have been widely adopted.

So, just from a medical standpoint, we just don’t see any basis, nor frankly does the medical community, to run another efficacy trial for glycemic management. There’s just no rationale to do so.

Joe Pantginis: Very, very fair answers. I appreciate it, and also the reminders. A quick question, and then my second question. So the quick question is, for the HCM study with soda, just curious as to any, obviously you’re looking for a different profile, but any views towards patient competition with approved products for HCM as well as developmental assets? And then the second question is, for 9211, since we’re approaching data, if you could remind everyone publicly, since this could be the first non-opioid approved for DPNP, what are some of the key benchmarks we’d be looking at when the data come out?

Craig Granowitz: I’ll answer the first question on enrollment, and competitive enrollment for the HCM trials. We’ve opened a number of sites in the U.S. We presented data on the trial design at the HFSA meeting and at the HCM meeting from the study PIs. The sites that we’re opening in the U.S., people like the protocol, they are interested in participating. We expanded the number of study sites in the U.S. as we previously shared and we’re in the process of getting all the regulatory approvals for all of the other countries right now and the other country approvals are on track or actually ahead of schedule of what we had anticipated at the time to get those government approvals to initiate the trial. So we feel pretty good on the design.

Just like our 9211 trial, it’s a pragmatic trial design. It’s really easy to follow. You don’t have to do all the echoes with the other trials. The duration is short. The endpoint is simple. You don’t need to do VO2 testing and a lot of other complicated physiologic testing. So the feedback we had at the investigator meeting has been very, very favorable. It’s a pretty easy study to do. So I hope that answers… I’ll pause answering…

Joe Pantginis: Great job, Craig. Thank you. Very good.

Craig Granowitz: Maybe I’ll turn it back over to Mike on benchmarks or the 9211 study, what we might be looking for. Would you like me to answer that?

Mike Exton: Look, I think maybe the — I assume, Joe, you’re talking about the primary endpoint and what delta we might see in pain scores.

Joe Pantginis: Yeah, primary and secondary. You know what? I mean, you could throw out some data there but also maybe include what you’re looking to surpass and also meaningfulness to patients?

Craig Granowitz: Great question. And I think when you look at a pain program, you have to look at two parameters. The first is the placebo-adjusted reduction in pain score. The second is the baseline to the maximum reduction in pain score because patients don’t get treated compared to placebo. They get treated compared to their baseline. And as you know, these patients have a significant placebo effect regardless. So the reductions in pain score of patients to their baseline is quite significant in all these trials. That notwithstanding, we did hear from our clinical experts and the FDA that the reduction in pain score that we were achieving in the pilot study, both in the DPNP and in the PHN study, were clinically meaningful compared to placebo.

And that’s looking in the range of, you know, 0.65 to 0.8. In the PHN study, the reduction in median pain score is even larger than in the DPNP trial. So, you know, I think it’s evidenced by the fact that there was tremendous uptake of the trial. And, again, we ran that entire study in the United States and we finished it many weeks early. The interest level was high. The protocol was easy to follow. And, you know, you can take what you will, but the study enrolled more quickly than expected. But I think that people found value, both the study sites and patients, found value in participating in the trial.

Mike Exton: Joe, allow me to sort of extrapolate into the real clinical world, if you like. And the beauty of this trial, as Craig mentioned, is pragmatism and association with how it’s likely patients are going to be treated for DPNP when and if this gets approved. And that is any new pain medicine is going to be stepped through generic medicines and whether it be gabapentin, pregabalin, etcetera, both from the physician perspective as well as from a managed care perspective. That, you can pretty much guarantee, happens in any genericized marketplace. And so to then demonstrate that you have significant efficacy on top of standard of care allows a physician and payers, quite frankly, to then say, okay, let’s start with the generic, which they will do anyway, but gives them confidence that the physician, instead of switching out pain meds, can add LX9211 on top, which as we all know physicians prefer to do rather than, particularly in pain, to switching out meds from one to the other.

And so we think that is not only scientifically the most valid way to go because it shows efficacy over and above the standard of care, but is likely to be welcomed by payers and physicians alike.

Joe Pantginis: Very, very helpful. Thanks for all the answers and good luck going into next month.

Mike Exton: Thanks, Joe.

Operator: And the next question comes from Yigal Nochomovitz with Citigroup. Please go ahead.

Yigal Nochomovitz: Yes, hi. Thanks for taking the question. Did you spend a little time talking about how you’re thinking about the INPEFA trajectory going forward into 2025 in terms of the quarterly growth and what the appropriate level of investment should be in that launch? And then also just with regard to which types of patients are receiving it and how many of them had to have gone through the prior author or needed to try one of the other SGLP-2s? Thanks.

Tom Garner: Hi, it’s Tom Garner. So I’ll take that one first and then anything else that you want to add on additionally. So as we looked at Q3, and I think as Mike mentioned earlier on, we did actually see some encouraging and continued modest growth of INPEFA even post the restructure that took place during the quarter. So if you just look at our overall dispense volume, that was at about 40% quarter over quarter, the number of unique prescribers grew by about 20%. And if you look at our new to brand share, that actually grew by about 20% as well. I guess the corresponding you may well have is, well, in which case, then why did the net revenues not follow those same trends? And that was because we had a significant growth to net true up at the start of the quarter, which impacts overall net revenues.

Just as a reminder, the dynamics within the heart failure marketplace is that this is a patient population that tends to skew heavily part B. So our med D exposure is in excess of 60% and commercial makes up around 30 with Medicaid and others making up the remaining 10%. In terms of our access and coverage, we have about 50% of lives covered in the US, although I think it’s worth noting again, that most of those patients required some kind of step through or utilization management as it regards to heart failure medication. So potentially having to step through another SGLT before being able to be able to prescribe for these patients. The value and access team that we have are continuing to engage very heavily and hard with the payer community with regards to INPEFA.

We have a number of outstanding bids for Medicare and commercial that we are hoping to pull through. And I think we’re now also beginning to see some of the dynamics clear in terms of the overhang that we saw throughout this year, which was the IRA, because three of our major competitors were listed on that top 10 drug list. And I think that that’s now giving payers clarity as to what the world looks like moving forward. So we continue to push INPEFA with our target prescribers. We’re continuing to grow the prescriber base. And now we have the refocused sales force. Our primary focus is pushing increased depth amongst our writers. So we anticipate modest growth quarter-over-quarter moving forwards. And obviously we also have eyes on INPEFA for HCM in the future as well.

And it’s worth noting that this will be largely the same customer base that we’ll be talking to as it relates to HCM. Mike, do you want to comment?

Mike Exton: I think the only additional add here is, when we did the restructure in September, we were very focused and targeted in how we created the new field and commercial organization with the balance of ZYNQUISTA and INPEFA. We will continue to evaluate that, as we said, with all scenarios as we move forward towards December 20. So to get to your question around what is the right level of investment that will be part of that scenario planning as we learn more and get greater clarity between now and December 20.

Yigal Nochomovitz: Okay. Thank you very much.

Operator: And the next question comes from Roanna Ruiz with Leerink Partners. Please go ahead.

Roanna Ruiz: Great, thanks. Afternoon, everyone. So could you elaborate on what drove the recent Viatris agreement for soda glyphosate and given your comment about greater focus on partnering, I was curious, what is your outlook on how to priorities future partnerships across soda or the other pipeline assets and considering different regions globally as well?

Mike Exton: Yeah. Hi, Roanna. It’s nice to speak with you again. And I think, look, for Viatris and the global partnership, clearly our focus as a company is the U.S. in terms of our commercial footprint at the moment. And so we were really looking for a strong global partner who had the ability to commercialize in those rest of world markets, if you like. And really, Viatris came to the top of the pile when we thought about that. And so in the engagement that we had with that company and Tom and team led the way from a commercial perspective, it was really a very good negotiation back and forth. And I think we got a win-win out of it with Viatris. And so we expect that to be a really fruitful partnership, actually. And clearly, as we mentioned already, they’re highly engaged, we’re highly engaged.

And that provides, I think, pretty significant additional value to the company that we wouldn’t have realized by ourselves. So that is clear. As it relates to sort of prioritizing the pipeline, I think for both 9211 and 9851, they lend themselves to partnering pretty significantly. And so I wouldn’t necessarily differentiate on the two. Having said that, with 9211 being a late Phase 2b asset that, if successful, shows strong efficacy replicating what we’ve seen in the original POC trial, we see that as a strong value creator. In fact, not only are there a number of pharma companies that currently have a pain franchise, but clearly there are others that are showing interest that have a neuroscience presence or have an adjacent interest in pain.

And so that, we think, being the nearest sort of readout is a significant opportunity. But clearly, given the number of deals that have been happening in weight management, weight loss and obesity, and some engaged partners that we’ve been discussing with, that also is an opportunity for partnering. And both of those, to truly realize the value of the assets, lend themselves towards partnering in some way. Both to realize the commercial opportunity and the commercial footprint you would need to commercialize those, as well as the breadth of indications and the investment that you would need to make that successful. And so that’s where, really, over the next 3 to 6 months, we will be doubling down in those discussions.

Roanna Ruiz: Got it. Thanks.

Craig Granowitz: Ron, I just wanted to add one other quick thing about Beatrice, is that they have a deep experience in cardiovascular medicine, both historically and currently. They have the old Pfizer portfolio. Some of their most important drugs are cardiovascular, and they have a deep experience in that area. And some of the more recent deals they’ve done have also been in the CB’s space. So in that regard, we have a partner that has a lot of shared vision around the heart and the heart failure market. So I’m excited about having them as a partner in that.

Roanna Ruiz: Makes sense. And as my second question, I was curious, could you elaborate a bit more on your thoughts on 9851 fitting into the treatment paradigm? I know you’ve talked about obesity, but also I think you’ve alluded to cardiometabolic disorders as well. As you sort of interrogate that product, what sort of differentiating features do you hope shine through for this asset?

Mike Exton: Yes. Look, I think there are a number of critical features. And as we know, this whole space is evolving rapidly and a lot of interest and a lot of different companies getting involved. A couple of very unique features that are quite different to the general field as we see it now. One is a small molecule. It’s going to be an oral once-a-day medicine, which as we know, a lot of patients prefer over injectables for whatever reason. And that continues despite the use of injectables over decades now. Secondly, this is not a GLP-1 or a GIP. It’s a completely different mechanism. And I think we can extrapolate from the data, even that we presented today from Obesity Week, if you wanted to fast forward into weight loss, a couple of the unique features on this preservation of lean body mass, which could potentially be important as we learn more about the current treatment paradigm.

The idea that it can be used in combination therapies and certainly in diabetes and other hypertension and other cardiometabolic diseases, hyperlipidemia, you can go on and on. It’s all about combination therapies and I’d be surprised if obesity isn’t the same way. And so having completely different and complementary mechanisms is helpful for that. And then there is this interesting perspective of the tolerability, because we know that GLP-1s now were used on average about 7 months and then people go off and oftentimes they do get this rebound in weight that we demonstrated in the mouse model here. And so you could foresee an area of this being a sort of a maintenance therapy that’s used in conjunction with a significant weight loss you get initially with a GLP-1.

So there’s lots of areas where you could predict a number of years into the future how this could be a very valuable add to a company that has a number of different types of assets in their portfolio and is able to mix and match those to really target the patient and the patient lifestyle that they see fit. So for that reason, we see that this is a very complementary mechanism and potential asset for partners.

Roanna Ruiz: Got it. Thanks.

Operator: Thanks. This concludes our question-and answer-session. I would like to turn the conference back over to Mike Exton for any closing remarks.

Mike Exton: Yes, look, firstly, thanks a lot for the great insightful questions, guys. Really great to catch up with you. We have a really unique time, not only between now and December 20, where we will get some clarity on how we move forward with ZYNQUISTA, but beyond there as we progress these three really important pipeline opportunities with sotagliflozin, in HCM, the very soon-to-be readout of 9211 in the PROGRESS Phase 2b study, which is another major catalytic event for us, and continuing to execute with Alan and the team to finalize the IND enabling studies for 9851 that are going as per plan and to have that submitted mid-next years. So while we are very much focused on this near term and seeing how we move forward with our commercial efforts for ZYNQUISTA, we have a lot of things coming up in the very near future to look forward to, and we’re really excited about the breadth of opportunity that we have and look forward to giving further updates as we gain more clarity over the coming weeks.

So appreciate everyone listening in, and we will no doubt catch up with some of you again later on. So thanks very much, and back to you, operator.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.