Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotech company Lexicon Pharmaceuticals (NASDAQ:LXRX) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Lexicon and see what CAPS investors are saying about the stock right now.

Lexicon facts

Headquarters (founded)

The Woodlands, Texas (1995)

Market Cap

$1.2 billion



Trailing-12-Month Revenue

$1.1 million


Co-Founder/CEO Arthur Sands
Co-Founder/Chief Technology Officer Brian Zambrowicz

Return on Equity (average, past 3 years)



$222.8 million / $23.5 million


Aptalis Pharma

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 21% of the 63 All-Star members who have rated Lexicon believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, touched on the stock's seemingly unsustainable valuation:

If there's one thing recent history has told us about Lexicon, it's that a market cap of over a billion for their highly speculative pipeline will not hold. Lexicon has assets, to be sure, and at a market cap of [$500M] or even [$600M] in this frothy market you wouldn't be hearing anything about them from me. But LX4211 doesn't have a clear place in the rapidly evolving field of glycemic control, and progression to phase III is on hold as a partnership is awaited. Telotristat is in the early stages of what undoubtedly will be a long phase III trial for the narrow indication of carcinoid. If the last year's pattern holds, the share price will be well under [$2 per share] again before any positive catalysts emerge from the pipeline.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.