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Lexicon Pharmaceuticals Inc (NASDAQ:LXRX)
Q4 2019 Earnings Call
Mar 12, 2020, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to the Lexicon Pharmaceuticals' Fourth Quarter and Full-Year 2019 Financial Results and Business Update Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, March 12, 2020.

I will now turn the call over to Dr. Kimberly Lee, Head of Investor Relations and Corporate Strategy. Please go ahead.

Kimberly Lee -- Head of Investor Relations and Corporate Strategy

Thank you. Good morning and welcome to the Lexicon Pharmaceuticals fourth quarter and full-year 2019 financial Results and business update conference call. Joining me on today's call are Lonnel Coats, Lexicon's President and Chief Executive Officer; Alex Santini, Executive Vice President and Chief Commercial Officer; Dr. Pablo Lapuerta, Executive Vice President and Chief Medical Officer; Dr. Praveen Tyle, Executive Vice President of Research and Development; and Jeff Wade, Executive Vice President of Corporate and Administrative Affairs and Chief Financial Officer. After our formal remarks, we will open the call up for Q&A.

Earlier today, Lexicon issued a press release announcing our financial results for the fourth quarter and full-year 2019, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call, along with the slide presentation, will be accessible in our Investor Relations section of our website.

During this call, we will review the information provided in the release, provide an update on our clinical programs and then use the remainder of the time to answer your questions.

Before we begin, let me remind you that we will be making forward-looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of XERMELO, Zynquista, LX9211 and our other drug candidates. These statements may include characterizations of the commercial performance of XERMELO; the expected timing and results of clinical trials of sotagliflozin, telotristat ethyl, LX9211 and our other drug candidates and the regulatory status and market opportunity for those programs.

This call may also contain forward-looking statements relating to Lexicon's growth and future operating results, discovery and development of other drug candidates, strategic alliances and intellectual property, as well as other matters that are not historical facts or information. Various risks may also cause Lexicon's actual results to differ materially from those expressed or implied in such forward-looking statements. These risks include uncertainties related to the success of our commercialization efforts for XERMELO; the timing and results of clinical trials and preclinical studies of sotagliflozin, telotristat ethyl, LX9211 and our other drug candidates; our dependence upon strategic alliances and other third-party relationships; our ability to obtain patent protection for our discoveries; limitations imposed by patents owned or controlled by third parties; and the requirements of substantial funding to conduct our research, development and commercialization activities.

For a list and description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission.

With that, I will now turn the call over to our President and CEO, Lonnel Coats.

Lonnel Coats -- President and Chief Executive Officer and Director

Thank you, Kim, and good morning to everyone and thanks for joining us on the call. 2019 was marked by some meaningful milestones, as well as some challenges for Lexicon.

Let me start with XERMELO. XERMELO achieved US net sales of $8.5 million in the fourth quarter of 2019 and $31 million for the full-year of 2019. In 2020, we expect US XERMELO net sales percentage growth in the high-single digits in the first quarter and in the mid-teens for the full-year. We are also being very thoughtful about the lifecycle management of XERMELO, also known as telotristat ethyl and we are very excited about the development of telotristat ethyl and biliary tract cancer. Dr. Lapuerta will be speaking about the broad program for telotristat ethyl in a little bit.

In type 1 diabetes, as you all know, Zynquista, which is sotagliflozin was approved by the European Authorities last year. In the meantime, we've been working diligently to find a path forward for sotagliflozin in the US after receiving a complete response letter, or a CRL, regarding our application for regulatory approval. Towards the end of last year, we engaged in formal dispute resolution proceedings with the FDA's Office of New Drugs, which ultimately denied the appeal of the previously issued CRL. We subsequently appealed the decision to the FDA Center for Drug Evaluation and Research, also known as CDER. And just last night, we received a response from CDER confirming the Office of New Drugs previous appeal decision regarding the CRL. We are evaluating the feedback they provided in their response and we will provide an update on our plans for our next steps with type 1 diabetes by our first quarter earnings call.

We have reported preliminary top line results for the first four Phase 3 clinical trials of sotagliflozin and type 2 diabetes and Dr. Lapuerta will speak about the remainder of the type 2 diabetes program and the two outcome studies, SCORED and SOLOIST, that are designed to demonstrate benefits in and support labeling for heart failure and chronic kidney disease. We are engaged in discussions around potential partnerships with sotagliflozin, which will be necessary to complete those outcome studies.

We continue to advance our earlier stage product candidate LX9211 in neuropathic pain. AAK1 is the therapeutic target for LX9211 and it is a novel target with no association with the opioid pathway. Preclinical data for LX9211 demonstrates excellent CNS penetration and a reduction in pain behavior and models of neuropathic pain. Phase 1 data are consistent with the drug's preclinical profile and reflects a favorable pharmacokinetic profile, which supports once daily dosing. We expect to begin enrolling patients with diabetic peripheral neuropathic pain and a Phase 2 proof of concept study in the first half of this year.

Before I close, let me touch on our cash position. We ended the fourth quarter with approximate $272 million in cash and short-term investments, and we will continue to prudently manage our cash and expect that our working capital will be sufficient to sustain our operations for at least the next year.

With that, let me turn the call over to Dr. Lapuerta to review our pipeline.

Pablo Lapuerta -- Executive Vice President and Chief Medical Officer

Thanks, Lonnel. Our confidence grows for telotristat ethyl, gastrointestinal benefits as seen on Slide 6 here, are documented in our product XERMELO's labeling. We also see opportunities to study the potential effects of telotristat on tumor growth in fibrosis. Early preclinical and clinical explorations are under way.

The next slide summarizes our clinical development program in patients with biliary tract cancer. The conduct of this open-label Phase 2 study has been supported by preclinical evidence and safety to date has been satisfactory. We continue to anticipate data for our initial efficacy cohort will come in the fourth quarter of 2020. And at the ASCO Gastrointestinal conference this year, we presented TELEACE, with real world data on XERMELO in patients with carcinoid syndrome and neuroendocrine tumors. This was a retrospective chart review of 200 patients who were on standard background therapies and received telotristat ethyl for an average of 12 months in US clinical practice. Radiology reports indicated a mean tumor size reduction of 0.59 centimeters after initiation of telotristat. The P value was 0.006.

In addition, there are numerous investigator-initiated studies of telotristat ethyl that should help inform further development of the drug. Results from one of them were disclosed in the fourth quarter of 2019 at the North American Neuroendocrine Tumor Society Conference. In that study, telotristat ethyl was studied in mice with valvular disease induced by hypertension. Telotristat reduced the progression of valvular disease impacting several markers of valvular fibrosis.

Turning to sotagliflozin. In the fourth quarter of 2019, we published results of the study on its mechanism of action. Sotagliflozin led to a significant delay in radiolabeled glucose uptake after a standardized meal. Here, sotagliflozin, canagliflozin or placebo were given in the morning. This meal was administered about five hours later, and you can see a higher rate of peak glucose absorption with placebo in red and canagliflozin in blue, then with sotagliflozin in black. The study also provided data on urinary glucose excretion, which was significantly lower with sotagliflozin than canagliflozin. We believe this study establishes sotagliflozin as a dual inhibitor of SGLT1 and SGLT2. And it points to the potential for lower glucose variability on sotagliflozin.

In the fourth quarter, we also published results from patient interviews, performed in a representative sample of participants from the sotagliflozin Phase 3 program in type 1 diabetes. The interview participants and the interviewer were all blinded to study treatment. Here, you see the numbers of patients reporting different benefits overall and for sotagliflozin and placebo. The top five benefits were less hyperglycemia, more stable blood sugar, lower A1C, more effective insulin and less hypoglycemia. They were all reported more often for sotagliflozin than placebo and they were generally rated as very or extremely important to patients. The study was valuable because it demonstrated that glucose stability and control experience day-to-day and the management of type 1 diabetes was very meaningful to these patients. We are anticipating more results in the next quarter for our type 2 diabetes studies of sotagliflozin, and we have recently received important feedback from the FDA on our strategy toward the long-term outcome studies.

You may be aware that just this week, the FDA issued new draft guidance for the development of drugs in treating type 2 diabetes. The old guidance from 2008 required extensive data on cardiovascular safety and we have enough cardiovascular events in our program already to support a type 2 diabetes filing. The new guidance emphasizes having a certain amount of two-year data, plus extensive exposure of patients with older age kidney disease and heart disease. We estimate that by June, we will have met all of those requirements as well. Importantly, we have very recently asked the FDA about going beyond type 2 diabetes in the SOLOIST study. The FDA response has been supportive. And this study is adequately designed to achieve a unique indication for the treatment of patients with worsening heart failure, while other large programs have treated stable patients. SOLOIST enrolls patients with acute worsening of their disease, providing a new treatment at the time when patients needed the most.

FDA recent feedback on the SCORED study has also been supportive. The design of SCORED will allow for indications relating to both heart failure and renal disease. Other SGLT programs have enrolled patients with high levels of microalbuminuria. SCORED in contrast enrolled a broader population with moderate and severe kidney disease without any albuminuria requirement. And SCORED is the largest study of its kind. Both SCORED and SOLOIST can provide results in 2021.

Of note, our FDA interactions support that these potential indications in heart failure and chronic kidney disease can be considered regardless of any indication in type 1 or type 2 diabetes.

I will now turn the call over to Jeff to review our financials.

Jeffrey L. Wade -- Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer

Thank you, Pablo. This morning I will discuss key aspects of our fourth quarter and full-year of 2019 financials. More financial details can be found in our Form 10-K, which will be filed shortly.

Now, please refer to Slide 14 of our presentation. As indicated in our press release today, revenues for the fourth quarter decreased to $8.7 million from $17.1 million for the corresponding period in 2018, primarily due to lower revenues recognized under collaboration and license agreements. Full-year 2019 revenues increased to $322.1 million from $63.2 million, primarily due to collaboration revenues recognized from amounts received in connection with the termination of the alliance with Sanofi and recognition of the remaining amounts allocated to the performance obligations from the initial Sanofi collaboration agreement for development activities relating to sotagliflozin, as well as an increase from net product revenue. Net product revenues for full-year 2019 included $31 million and $1.3 million, respectively, from net sales of XERMELO in the US and the sale of bulk tablets to Lexicon's collaborator, Ipsen.

Cost of sales related to sales of XERMELO was $0.7 million and $0.6 million, respectively, for the fourth quarter of 2019 and 2018. Full-year 2019 and 2018 cost of sales was $3.2 million and $2.5 million, respectively.

Research and development expenses for the fourth quarter increased to $40.6 million from $12.3 million for the corresponding period in 2018, primarily due to increases in external clinical development costs related to sotagliflozin subsequent to Lexicon regaining the rights and responsibilities for development and commercialization of sotagliflozin pursuant to the termination of the Sanofi alliance. Full-year 2019 R&D expenses decreased to $91.9 million from $100.2 million, due to decreases in professional and consulting activities and lower external clinical development costs.

Selling, general and administrative expenses for the fourth quarter were $14.6 million compared to $16.6 million for the same period in 2018. Full-year SG&A expenses decreased to $56.8 million from $63.8 million, primarily due to lower marketing expenses and professional and consulting costs.

We recognized an impairment loss of $28.6 million in 2019 relating to an indefinite lived intangible asset associated with Lexicon's 2010 acquisition of Symphony Icon, due to the decision to terminate research and development activities related to a program for irritable bowel syndrome that was among the assets acquired.

An income tax benefit of $6 million in 2019 was recognized in connection with the impairment loss, which resulted in a decrease of the deferred tax liability and created an income tax benefit. During 2018, there was no income tax benefit.

Net loss for the fourth quarter was $51.1 million, or $0.48 per share, as compared to a net loss of $16.8 million, or $0.16 per share, in the corresponding period in 2018. For the fourth quarter of 2019, net loss included non-cash, stock-based compensation expense of $3.5 million. For the fourth quarter of 2018, net loss included non-cash, stock-based compensation expense of $2.8 million.

Net income for the full-year 2019 was $130.1 million, or $1.16 per diluted share, as compared to a net loss of $120.5 million, or $1.14 per share, in 2018. For the full-year 2019, net income included non-cash, stock-based compensation expense of $14.2 million. For the full-year 2018, net loss included non-cash, stock-based compensation expense of $11.7 million.

We ended 2019 with $271.7 million in cash and long-term investments, as compared to $160.1 million as of December 31, 2018. We expect that our working capital will be sufficient to fund our operations for at least the next year, and we will continue to prudently manage our expenses and we will seek further opportunities to extend our cash runway.

Turning to our financial guidance for 2020. As Lonnel mentioned earlier, we expect US XERMELO net sales growth in the high-single digits percentage in the first quarter and in the mid-teens for the full-year. As for operating expense guidance, including R&D and SG&A expenses, we expect total operating expenses to be in the range of $245 million to $275 million. We expect R&D expenses to be in the range of $190 million to $210 million. We expect to incur a disproportionate share of our R&D expenses for the year, about a third in the first quarter as a result of activities relating to the completion of the type 2 diabetes glycemic control clinical trials and the ramp up of the transition from Sanofi. We expect SG&A expenses for the year to be in the range of $55 million to $65 million. Non-cash expenses are expected to be approximately $22 million of our total operating expenses, consisting of $17 million of stock-based compensation and $5 million of depreciation and amortization.

As a reminder, under the terms of our settlement agreement, Sanofi committed to pay Lexicon $260 million. Of that total, the first installment in the amount of $208 million was paid in September of last year. The second installment in the amount of $26 million was payable in March of this year and has been received. And the final installment in the amount of $26 million is payable this September. The $52 million in payments due this year will not affect this year's revenues because the full revenue impact of the settlement was recorded in 2019, but they will obviously benefit our 2020 cash flow.

As Lonnel mentioned, we are engaged in discussions around potential partnerships for sotagliflozin, which will be necessary to enable completion of the long-term outcome studies, SCORED and SOLOIST, that are designed to demonstrate benefits in and support labeling for heart failure and chronic kidney disease.

I will now ask the operator to begin our Q&A session.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Yigal Nochomovitz from Citi.

Samantha Semenkow -- Citigroup -- Analyst

Hi. This is Samantha on for Yigal. Thanks very much for taking our questions. I wonder if you could sort of set expectations for data releases that we'll see in regards to type 2 diabetes in the first half, and you noted that we'll get top line disclosures in the first half and then we'll get Phase 3 presentations at ADA. Can you just set expectations of what this top line disclosures will include and what additional data we'll see at ADA?

Lonnel Coats -- President and Chief Executive Officer and Director

Well, we expect to provide top line data that would be generally consistent with what we've done previously, which is whether we met the primary endpoint and indications relating the overall safety profile. At ADA, we are making submissions to publish some of the data that came out toward the end of last year, those studies. And hope to have those presented in detail at ADA this year. And also, subsequently at EASD. And we'll continue to work toward publishing the full data from the program as we go forward.

Samantha Semenkow -- Citigroup -- Analyst

Great. And then could you also confirm -- I think your prior disclosure was the type 2 diabetes, you would be filing in the first half of 2020. Is that still something we should expect or is that then set aside for now?

Lonnel Coats -- President and Chief Executive Officer and Director

So, a decision about filing really requires a partner for us. And so, it would be part of something that is involved in the partnership discussions. We wouldn't be in a position to file in the first half at this point, given the time that it's taken to get to a partnership, but would still be able to file in 2020.

Samantha Semenkow -- Citigroup -- Analyst

Got it. And then just lastly, is there any read through from the FDA's position on type 1 diabetes that we should be considering for type 2? Or are they just completely separate indications at this point from the FDA's perspective?

Lonnel Coats -- President and Chief Executive Officer and Director

They're totally separate indications from the FDA's perspective. The concern relating to type 1 diabetes isn't really -- has always been the inherent DKA risk that is involved in type 1 diabetes, that's part of the disease in which we saw an imbalance in our clinical studies and how that can be addressed, and what's the appropriate way to address that risk. And that's not an issue in type 2 diabetes.

Samantha Semenkow -- Citigroup -- Analyst

Got it. Understood. All right. Thanks very much for taking the question.

Operator

Your next question comes from the line of Kambiz Yazdi with Wedbush Securities.

Kambiz Yazdi -- Wedbush Securities -- Analyst

Good morning. This is Kambiz on for Liana. What are the growth drivers for his XERMELO in carcinoid diarrhea?

Lonnel Coats -- President and Chief Executive Officer and Director

What was the question again? I'm sorry.

Kambiz Yazdi -- Wedbush Securities -- Analyst

Sorry, can you hear me?

Lonnel Coats -- President and Chief Executive Officer and Director

Yeah. Say it again.

Kambiz Yazdi -- Wedbush Securities -- Analyst

What are the growth drivers for his XERMELO in carcinoid diarrhea?

Lonnel Coats -- President and Chief Executive Officer and Director

Let me turn it over to Alex.

Alexander A. Santini -- Executive Vice President and Chief Commercial Officer

Yeah. The main growth factor for our XERMELO brand is activating new patients on to drug and then holding on to them with good persistency and adherence over time. So those are the two main drivers of our overall growth potential.

Kambiz Yazdi -- Wedbush Securities -- Analyst

Thank you.

Operator

Your next question comes from the line of Jessica Fye from J.P. Morgan.

Daniel Wolle -- J.P. Morgan -- Analyst

Hi. This is Daniel for Jessica. Thanks for taking our question. Besides partnership, is there anything that would be a gating factor for filing SOTA in type 2 diabetes in the US?

Lonnel Coats -- President and Chief Executive Officer and Director

No. The reason it's a gating decision is that, Lexicon is in no position to commercialize type 2 on its own. So we need to make sure that we have carried all these conversations to their full conclusion are relative to type 2. It's a fairly sizable and competitive market and we will need a partner to be able to commercialize it. So, that is the gating decision.

In terms of the data and the quality of the data and the quality of the clinical program, I think Dr. Lapuerta has been consistently clear, we have a very strong program. And what are the requirements are to file, we are in a very good position to file for type 2. But I think the overall value of this program build beyond type 2, which I think Dr. Lapuerta has spoke to earlier and that's how we are designing the program to have a unique position in heart failure, as well as have a unique position with the drug for chronic kidney disease that goes beyond what the current class offers. That's where the real opportunity is, and I think that's where most of the conversation is focused within the partnership discussions.

Daniel Wolle -- J.P. Morgan -- Analyst

Got it. And then in terms of the partnerships, can you talk about the strategies that you're considering?

Lonnel Coats -- President and Chief Executive Officer and Director

Strategies we're considering in terms of partnership?

Daniel Wolle -- J.P. Morgan -- Analyst

For SOTA in type 1 or...

Lonnel Coats -- President and Chief Executive Officer and Director

Yeah. So, we always intend to -- Lexicon will participate in type 1 on their new partnership arrangement because we believe that there is a lot of value we can create relative to both the continued development, as well as the commercial development for type 1. As for type 2 heart failure, as well as chronic kidney disease, it definitely requires a partner that will have a global footprint or has a global footprint in order for us to realize the value and competitive markets. And so, our strategy is to find a global partner with a footprint that allow us to seek uniqueness in all of the indications accordingly.

Daniel Wolle -- J.P. Morgan -- Analyst

All right. Thank you very much.

Operator

Your next question comes from the line of Stephen Willey from Stifel.

Stephen Willey -- Stifel, Nicolaus & Company -- Analyst

Yeah. Hi, good morning. Thanks for taking the questions. So, I guess, SOLOIST and SCORED are both large multinational trials and they're obviously enrolling in a variety of different countries that are presumably becoming a lot more restricted with respect to patient hospital visits, etc., etc. So, is there any impact at all that you can quantify maybe just as a result of some of all this coronavirus mayhem? And, I guess, how confident are you in some of the previously stated timelines for the completion of those trials? And do you think that some of this kind of new complexity somehow changes the cadence of partnering discussions?

Lonnel Coats -- President and Chief Executive Officer and Director

Steve, I don't think it changes the cadence of the partnership discussions, but I do think that anybody who has a program in development is global. We'll be at risk with the latest information that's coming from the coronavirus and all the actions that are being taken globally to try to contain it. So, without a doubt, I do believe it will have impact on everybody's timelines, if you have programs globally.

To your point, patients need to go into institutions, they need to be able to go on and receive their medicines and so forth and so on. With that, I think all of the partners we have in terms of CROs and so forth are going to other measures to make sure there is access. And how well they're able to do that, we'll have to see, because I don't think anybody expected what we are seeing right now. And everybody is trying to make the appropriate adjustments. So, to try to give you some qualifiable way would not be appropriate because we just don't know until we engage and see how this thing continues to progress. It's also why we are being a little bit more conservative even around the XERMELO estimates. A lot of our business is inside of academic institutions and hospitals that are now starting to close their doors and shut out reps. So, this is very -- we're in our early days now, so it's best for us to be a little bit more conservative than aggressive in all of our forecast.

Stephen Willey -- Stifel, Nicolaus & Company -- Analyst

Okay. That's helpful. And maybe just lastly for clarification purposes, I was aware of the updated FDA guidance that was published last week. But, I guess, how does that directly impact, I guess, your filing timelines or your regulatory process? I know that you mentioned that you have enough CV events within the current trials, I guess, to file, but are timelines or is the ease with which you can pursue registration somehow improved by the updated guidance?

Lonnel Coats -- President and Chief Executive Officer and Director

The updated guidance is not going to directly improve registration, I think, for anybody because it expands the timing which you have to do the work and it focuses on specialty populations. Our message here is that, regardless the guidance, whether it's 2008 that they apply to SOTA or they try to apply the 2020 guidance, we will be ready in a position, particularly in any discussions we have with partners to be able to file the program. So nothing is going to prevent us from being able to file the program and we're in pretty good shape with all of our data to do so.

Stephen Willey -- Stifel, Nicolaus & Company -- Analyst

Okay. Thanks for taking the questions.

Lonnel Coats -- President and Chief Executive Officer and Director

You bet.

Operator

Your next question comes from the line of Alan Carr from Needham.

Alan Carr -- Needham & Company -- Analyst

Thanks for taking my questions. With respect to the partnership efforts around sotagliflozin, what's the strategy if this -- if the discussions progress longer than you'd like? What happens next and what does -- what would Lexicon strategy be at that point, what would the Company look like? Thanks.

Lonnel Coats -- President and Chief Executive Officer and Director

Alan, that's a great question and I'm going to answer that question for you on our first quarter earnings call. One of the things I promise that we will not engage in this process forever because we have -- we are very blessed in many ways, we talked about 9211, we've talked about expanding the XERMELO program for BTC. We have -- with the things that we still haven't talked about that can create value for Lexicon. And so, we can't drag this on too long where we began to not focus on the rest of our portfolio. So, I believe by the time we meet again for our earnings call, you'll have the clarity of that question.

Alan Carr -- Needham & Company -- Analyst

Okay. And then can you talk a bit more about the 4911, the trial design -- or I'm sorry, 9211. Talk about the 9211 trial design, what you expect to learn from this first cohort later this year? Thanks.

Lonnel Coats -- President and Chief Executive Officer and Director

Great question. I'll turn it over to Dr. Tyle.

Praveen Tyle -- Executive Vice President of Research and Development

So, Alan, what we are starting is a randomized, double-blind, placebo-controlled, parallel group, multicenter study. All the centers are in US, and we are going to evaluate efficacy, safety and pharmacokinetics of 9211 in the diabetic peripheral neuropathic pain population. We are not going to have any results this year. This study is going to take approximately 18 months to enroll. So, we will probably have this Phase 2 study, proof of concept study finished by end of next year. We are estimating that we will enroll 282 patients. It will be all listed on clinicaltrial.gov, and we are going to study two doses of 9211 at this time.

Alan Carr -- Needham & Company -- Analyst

All right. And then one other one around -- so around XERMELO and biliary tract cancer, that's the one that's going to have data later this year, I guess. What do you expect to learn from this first cohort? How much value you're going to be building around the data from just that first cohort?

Lonnel Coats -- President and Chief Executive Officer and Director

Dr. Lapuerta?

Pablo Lapuerta -- Executive Vice President and Chief Medical Officer

In the first cohort, we want to look at the first 20 patients that are enrolled and look at their progression-free survival at six months. So we hope that the majority of them will have achieved six-month progression-free survival, and I think that would encourage us to move forward. Unfortunately, this is a disease that advances very rapidly. And to have a majority would be very encouraging.

Alan Carr -- Needham & Company -- Analyst

What would a subsequent cohort look like, the second one?

Pablo Lapuerta -- Executive Vice President and Chief Medical Officer

Would be -- well, they have the same patient characteristics. There is no change in the population. It's just that if we don't see encouraging results in the first cohort, we can manage our resources and focus on other programs.

Lonnel Coats -- President and Chief Executive Officer and Director

This program is designed to succeed early or fail early.

Alan Carr -- Needham & Company -- Analyst

All right. Great. Thanks for taking my questions.

Operator

Your next question comes from the line of Kevin Kedra from G.Research.

Kevin Kedra -- G.Research -- Analyst

Thanks for taking the questions. Just want to get a sense with the partnership discussions and how critical is the type 2 indication to these discussions, given how long SGLTs have been out there for type 2. I think they've been out there for roughly a decade, be fairly late coming in versus areas like heart failure and CKD. You'd still be relatively early in the competitive landscape on that front. So how do you kind of balance that when having discussions with partners?

Lonnel Coats -- President and Chief Executive Officer and Director

Kevin, you are spot on with that question. I'll give you Lexicon's view and of course, we're very flexible in terms of wanting to achieve as much as we can in terms of indications. But we believe the net value where we can separate clearly from the -- not just within the class, but clearly create value across the portfolio is in heart failure, particularly the way we've designed our clinical program. We also believe that we can do it in kidney disease or chronic kidney disease. And so, those are the two we believe will give the greatest value of separation and differentiation, which is why we need a partnership to complete them because they are large trials and they are significant in terms of creating that evidence. But once we have that evidence, I think we have a very unique position we can come to market with SOTA.

Also, the interesting thing is, when you break down the patient who has worsening heart failure, a huge percent of underlying that has type 2 diabetes. When you break down patients who have chronic kidney disease, a huge percent of them underlying their disease is type 2 diabetes. So, you're going to get a type 2 diabetes one way or the other. But if we focus and are able to shift our resources and be able to accelerate the long-term studies and bring them in line with the timelines that we just expressed, you have every chance to be able to have a differentiated product that seizes opportunity where there is a growing need. So you're absolutely correct. From our view, that is where the greatest opportunity is versus just type 2.

Kevin Kedra -- G.Research -- Analyst

Great. Thanks.

Operator

[Operator Instructions] You do have a follow-up question from the line of Kambiz Yazdi from Wedbush Securities.

Kambiz Yazdi -- Wedbush Securities -- Analyst

Hi. Just one follow-up, how long do you expect cash runway are anticipated to last?

Lonnel Coats -- President and Chief Executive Officer and Director

I think as we noted, that we expect the cash runway to run another year and we're looking for ways to continue to extend that.

Kambiz Yazdi -- Wedbush Securities -- Analyst

Thank you.

Operator

There are no further questions in queue. I will now turn the call over to Mr. Coats for his closing remarks.

Lonnel Coats -- President and Chief Executive Officer and Director

Well, thank you, everybody, for joining us this morning. We have a very busy year ahead, as always, here at Lexicon, and we expect top line data from the remaining core Phase 3 studies for sotagliflozin in type 2 diabetes. I think as we've tried to communicate on the call, we are greatly excited about really are those long-term studies, but they will require funding because we think the separation will happen for this compound in a significant way both focused on the SOLOIST program where we have a unique design for worsening heart failure, as well as the SCORED program that could lead to, as Dr. Lapuerta said, that has been verified in our communication with the FDA to a unique label for renal disease, as well as for heart failure. So we're very excited about advancing these partnership discussions to a point where we hope that we can get something done, and get these studies done and get the product available in market.

As for our -- rest of our pipeline, we are making advances as we have outlined for LX9211, a remarkable program, I think, that could have even more acceleration as we began to focus more on it. And for BTC, we look forward to calling out the data on progression-free survival by the end of this year on the first efficacy cohort that we will have completed. So, a very busy year ahead. Look forward to engaging with you as we come into our first quarter earnings call. Thank you.

Operator

[Operator Closing Remarks]

Duration: 38 minutes

Call participants:

Kimberly Lee -- Head of Investor Relations and Corporate Strategy

Lonnel Coats -- President and Chief Executive Officer and Director

Pablo Lapuerta -- Executive Vice President and Chief Medical Officer

Jeffrey L. Wade -- Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer

Alexander A. Santini -- Executive Vice President and Chief Commercial Officer

Praveen Tyle -- Executive Vice President of Research and Development

Samantha Semenkow -- Citigroup -- Analyst

Kambiz Yazdi -- Wedbush Securities -- Analyst

Daniel Wolle -- J.P. Morgan -- Analyst

Stephen Willey -- Stifel, Nicolaus & Company -- Analyst

Alan Carr -- Needham & Company -- Analyst

Kevin Kedra -- G.Research -- Analyst

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