This isn't the best way for a company to begin its work week. On Monday, shares of Lexicon Pharmaceuticals (LXRX 0.91%) fell sharply earthward, losing over 27% of their value. This followed the release of the biotech's fourth-quarter results, accompanied by a discouraging update about one of its pipeline drugs.
For the quarter, revenue was "negligible," similar to that of Q4 2020. This is not unusual for a clinical-stage biotech like Lexicon, which as a pre-commercial business has no products yet on the market. Due to increases in both research and development, and selling, general, and administrative expenses, net loss deepened to $25.6 million ($0.17 per share) from the year-ago shortfall of $5.5 million.
Analysts tracking the stock expected the top line to be minuscule. As for net loss, they were anticipating a slightly deeper deficit of $0.18 per share.
Although those financials were well within expectations, Lexicon surprised on the downside with an update about its leading pipeline drug, sotagliflozin, as a treatment for the prevention of heart failure The company said it is voluntarily withdrawing its New Drug Application (NDA) with the Food and Drug Administration (FDA) for sotagliflozin .
Lexicon quoted its CEO Lonnel Coats as saying that the move was made "to correct a technical issue that we recently identified, and we plan to promptly resubmit early in the second quarter of 2022."
The company did not elaborate on what that "technical issue" might have been.
For any clinical-stage biotech, success or failure depends heavily on the pipeline. So it's no wonder that the market gave the cold shoulder to Lexicon following the sotagliflozin revelation. Investors will keep a sharp eye on the company to see if it resubmits next quarter as promised.