Why Lexicon Pharmaceuticals' Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology company Lexicon Pharmaceuticals (Nasdaq: LXRX  ) jumped as much as 13% following the release of positive phase 2 clinical data on a key cancer drug.

So what: Lexicon's phase 2 trial for telotristat etripate, an oral drug aimed at treating carcinoid syndrome, a condition caused by metastatic carcinoid tumors that causes diarrhea and malnutrition, hit its primary efficacy endpoint. According to the data released today, patients experienced a 46.4% mean reduction from baseline over 12 weeks with basically no randomization being responsible for the results. Of the 15 patients tested, only one withdrew from the study, and that had nothing to do with the safety profile of the drug itself. Lexicon has already announced the move to a phase 3 study of telotristat etripate.

Now what: Before you get excited and invite your friends over for a party, keep in mind that this data includes an incredibly small sample size of 15 patients... fifteen! That's it! The data is encouraging, but I'm going to need to see how this translates into a larger patient profile before I'm sold on its efficacy. On the plus side, telotristat etripate does have both orphan drug status and fast track status, which should protect it from competing drugs for seven years if approved and allow it to work more closely with the FDA, which could facilitate bringing the drug to market quicker if phase 3 data proves as statistically meaningful as this phase 2 data did.

Craving more input? Start by adding Lexicon Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 12, 2012, at 5:45 PM, castech97 wrote:

    n = 15. No problem with that (phase 2) especially in view of the highly compelling results. Obviously, The FDA and EMA (European Medicines Agency) were sufficiently impressed to grant Lexicon orphan status. Fast track is another endorsement. Looks to me like Lexicon is grooming a winner.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2055740, ~/Articles/ArticleHandler.aspx, 4/2/2015 12:28:49 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!