Healthcare Business

Is Lexicon Pharma a Stock to Buy After 90% Runup and FDA Nod?

Lexicon Pharmaceuticals Inc. (NASDAQ: LXRX) shares jumped on Thursday morning after the company announced that it received regulatory feedback from the U.S. Food and Drug Administration (FDA) regarding its heart failure treatment.

Specifically, the feedback is related to the results of the Soloist and Scored Phase 3 clinical studies. It essentially clears a key hurdle for partnership discussions around sotagliflozin in heart failure and enables a potential New Drug Application (NDA) filing in 2021.

The NDA submission would be for an indication to reduce the risk of cardiovascular death, hospitalization for heart failure, and urgent visits for heart failure in adult patients with type 2 diabetes with either worsening heart failure or additional risk factors for heart failure.

The feedback was provided in response to a request made by Lexicon following the completion of the Phase 3 studies regarding the potential submission of an NDA based on the results, taking into account their early close-out and other considerations.

Soloist was a study evaluating the cardiovascular efficacy of sotagliflozin versus placebo when added to standard of care in 1,222 patients with type 2 diabetes who had recently been hospitalized for worsening heart failure.

Scored was a study evaluating the cardiovascular efficacy of sotagliflozin versus placebo when added to standard of care in 10,584 patients with type 2 diabetes, chronic kidney disease and risks for cardiovascular disease.

Both Soloist and Scored achieved their respective primary endpoints and have since been published in medical journals.

Excluding Thursday’s move, Lexicon Pharmaceuticals stock had underperformed the broad markets with a retreat of about 6% over the past year. However, in the past six months alone, the stock was up about 90%.

Lexicon Pharmaceuticals stock traded up about 23% early Thursday at $4.82, in a 52-week range of $1.03 to $4.47. The consensus price target is $3.67.