Now this is a stock pop. On Thursday, shares of Lexicon Pharmaceutials (NASDAQ:LXRX) jumped 105% (no, that's not a typo) after the company issued a major positive regulatory update.
The happy news is that Lexicon's clinical-stage protein inhibitor sotagliflozin performed well enough in phase 3 clinical trials to support a New Drug Application (NDA) from the Food and Drug Administration. This paves the way for sotagliflozin to win approval for treating patients at risk of heart failure.
The company said that this "clears a key hurdle for partnership discussions around sotagliflozin ... and enables a potential NDA filing in 2021." It did not name any potential partners.
Previously, Lexicon had partnered with global pharmaceutical industry giant Sanofi (NASDAQ:SNY) on developing sotagliflozin to combat diabetes. Disappointing clinical results prompted Sanofi to terminate the collaboration in 2019.
Lexicon had received a $300 million up-front payment in that deal, but could have picked up $1.4 billion in milestone payments if the drug had advanced further as a diabetes treatment. Sanofi paid the company $260 million to exit their arrangement.
Following the Sanofi divorce, Lexicon has been a biotech in urgent need of good news, and on Thursday it received a huge dose of it. Heart disease is the leading cause of death in the U.S., and heart failure is one of the disease's more common complications. Sotagliflozin, then, will have significant potential in the now-likely case that it comes to market.