Needham & Company Positive on Lexicon Pharma (LXRX) Following Sotagliflozin Phase 3 Data; Affirms at 'Buy'

September 9, 2016 11:22 AM EDT
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Price: $15.20 -1.3%

Rating Summary:
    5 Buy, 3 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Needham & Company affirms Lexicon Pharma (Nasdaq: LXRX) with a Buy rating and $21 price target after Lexicon announced that the pivotal inTandem1 Phase 3 clinical trial of sotagliflozin met its primary endpoint, showing a statistically significant reduction in A1C at 24 weeks in patients with type 1 diabetes on a background of optimized insulin.

Analyst Alan Carr commented today, The reductions in A1c reported today are clinically meaningful in the context of a well-controlled T1D patient population and we believe larger reductions can be expected in a real-world population. There appears to be a reduction in risk of severe hypoglycemia w/sotagliflozin, a significant and important benefit. Decreases in A1c are generally associated with an increase in risk of hypoglycemia, the primary safety concern of T1D patients.

However, we note increased reports of several safety concerns that have been linked to SGLT2 inhibitors, including euglycemic DKA and genital infections. These effects were dose-dependent and raise the issue of whether 200mg may be more attractive than 400mg to regulators. We reiterate BUY, w/expectation that dual SGLT1/SGLT2 inhibitor sotagliflozin will have a profile at least comparable to SGLT2 inhibitors w/ potential for modest or moderate safety/efficacy advantages. We await competitor SGLT2 data in 2017. Regardless, we continue to believe there is a role for sotagliflozin in the treatment of both T1D and T2D. We remain favorably inclined ahead of FDA decision on telotristat in Carcinoid Syndrome (11/30/16).

For an analyst ratings summary and ratings history on Lexicon Pharmaceuticals click here. For more ratings news on Lexicon Pharmaceuticals click here.

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