Good morning, everyone. Thank you for joining our third day of our Piper Healthcare conference. Really excited to be featuring the team from Lexicon Pharmaceuticals. We've lots to cover over the next 25 minutes. And, first of all, congratulations on today's update on progress, enrollment, and start, and we'll talk about that, but just wanna acknowledge. Mm-hmm. The really great news as we kicked off. We'll start first sort of on INPEFA launch, right? Because a lot of our investors are paying close attention, and then we'll go to today's update. I guess the question that a lot of investors have is, at this junction, the year is ending, INPEFA got approved with a phenomenal label. Mm-hmm. You've done a great job winning formulary, and you're continuing to do that, and we'll talk about that- Mm-hmm ... into 2024. How do you— why own now, right? Why is 2024 a very big inflection point for INPEFA that they need to not miss that - Yeah and being ahead, and how do you foresee real growth? Yeah - for the company? So, yes, first of all, thanks for the question, and also thanks for acknowledging that the first patient has now been enrolled in LX9211 phase II-B study. So let me start with INPEFA. I think INPEFA is becoming a very important choice- Mm-hmm for patients living with heart failure, especially those patients who have recent and worsening heart failure. Mm-hmm. What is so awesome about launching now is that you have a brand of heart failure market. Yeah -that's growing 40% year-over-year. Wow! When you look in that class, you see the SGLTIs are growing- Mm-hmm -70% month-over-month. Mm-hmm. And so you see a remarkably expanding- Mm-hmm and growing market. And my argument always is, taking the time this year to get access, when you get that. Yeah broad access, then I fully expect INPEFA will join. Yeah -this growth. Yeah. And so even with that growth that we see with SGLTs- Mm-hmm You're only talking about 10, 12% penetration total. Yeah. There's a green field of opportunities- Yeah still there, that we have an opportunity to get once we get broad access. Mm-hmm. And then get into a high-growing market. So, and then the second thing I will say about INPEFA, for those who want reasons to believe- Mm-hmm -is that INPEFA is not just an SGLT2. Mm-hmm. It's an SGLT2 in one. Mm-hmm. Which means we've taken the time to mine our data- Mm-hmm to try to figure out what other nuances we see Mm-hmm in our data that allows us to possibly expand to new indications, because we have a long patent life. Mm-hmm with INPEFA. So we'll have a lot more to say as we finish- Yeah -that evaluation going into 2024. When we get into the second half of 2024- Mm-hmm I fully expect that we would have gotten the coverage that's necessary. Mm-hmm. The expansion of INPEFA and acceleration of INPEFA will be fully on its way. No, that's fantastic. I guess, you know, investors are tracking sort of every formulary win- Mm-hmm and market access. Mm-hmm. Maybe just give us a perspective on where are we now? Mm-hmm. How is that gonna change, sort of- Mm-hmm -over first half of 2024 going into the second half? Yeah. So, I'll take that one. Good morning, everyone. As we think about where we are in terms of access- Mm-hmm and I think as we shared at the end of the third quarter. Yeah ... we had about 25% of covered lives- Yeah as we exited the third quarter, which, if you bear in mind, we didn't actually launch the product until the end of June. Yeah. We've actually made some pretty encouraging progress there, even in a relatively short window, given that most bid processes for 2023- Yeah started the year before. So we've made some very nice progress there. Obviously, we announced- Mm-hmm -Express Scripts, which went live November first. So we would anticipate that that's gonna have a pretty big impact. What I can tell you is that since we last provided an update- Mm-hmm We've improved access by double digits at least. Right. So that's continuing to tick upwards. And I can tell you that our access team- Mm-hmm are very heavily involved Mm-hmm In discussions with all of the major payers, as you'd expect. Mm-hmm. The great news is, just as the clinical data- Mm-hmm is being well received by the clinical community. Mm-hmm They understand that INPEFA does offer something. Mm-hmm -that's different to the other SGLT- Yeah -only, SGLT2s, I should say. Those messages are also resonating- Mm-hmm very strongly with payers. Mm-hmm. In particular, payers that are managing both the pharmacy benefit- Mm-hmm and the medical benefit. Mm-hmm. Because, you know, the challenge with a heart failure patient is, they're a bit like a boomerang. Yeah. You know, they come into the hospital, they have an acute episode- Mm-hmm ... they then get dried out- Yeah Sent back into the community. Yeah. Unfortunately, they often come back very, very quickly. Mm-hmm. As we know with INPEFA, we're able to demonstrate very clear value for those patients, and in terms of stopping them- Yeah coming back into the hospital as well. So that message is resonating both with the hospital- Mm-hmm ... cardiologists, but it's also resonating very well- Mm-hmm With our community cardiologists. Mm-hmm. As we build access within the hospital setting, we would anticipate that our usage there is gonna accelerate only further. Further to what Lonnel said, you know, at the moment, only about one in ten patients leaves the hospital on an SGLT. Mm-hmm. With the 2022 guidelines- Yeah that were recently published, and the fact that AHA and ACC Yeah are pushing these really hard now Mm We do anticipate that that number is gonna increase very, very rapidly, and we believe that INPEFA is perfectly positioned- Mm-hmm to be the drug of choice for that, for that patient population. Do you notice... I guess going back to the formulary, where do you hope to be, of how many lives are covered, sort of in the middle of 2024, and then going into the end of 2024? So I mean, I would assume that we're probably gonna be exiting this year at, you know, close to 50%. Yeah. Our goal will be to obviously push that further throughout 2024. Mm-hmm. Our push within the access team at the moment, I mean, obviously, we're in the 25, 26 bid cycle- Mm-hmm We're offering appropriate value to the payer. Yeah. Obviously, we're trying to make sure that we have the long-term- Yeah - perspective in play for INPEFA, given- Yeah - the 10-year patent- Yeah that we have for this product, but at the same time, working with the payers to see how we could actually pull forward access- Yeah - into 2024. Yeah. The great news is, again, with the value proposition- Yeah that we're going with Yeah There seems to be plenty of opportunity to do that. So we do anticipate some off-cycle wins through 2024 and moving forward into 2025. No, that's helpful. Often we get this question from clients saying, now, as they recognize, right, that the market is open, like 10 patients with heart failure, and only one of them is on SGLT2, and there's plenty to go around between you and other SGLT2 class. But I guess the question here is, when you're out discussing, what do you emphasize the differentiation, where they can say, "Okay- Mm-hmm out of the different classes, we're in SGLT1 and SGLT2. Mm-hmm - "Here's why your patient needs to be on our drug." Like, what, what are your talking points? Yeah. Like, if you could just simplify that for our listeners, I think it could- So I put it down to kind of three key factors. Yeah. First off, our sales team is wholly focused on heart failure. Yeah. You know, that, for us, is- Yeah - front and center. Mm-hmm. We are not talking about any other indication where the other SGLTs- Mm-hmm are indicated. So I think that that focus and precision actually is a clear benefit- Mm-hmm In terms of the message that we're conveying to customers. The second is just the breadth of the label that we have. Yeah. I think you mentioned it yourself. You know- Yeah We do have a very strong label. Irrespective of any type of heart failure- Mm-hmm - INPEFA works- Mm-hmm and is indicated. And then the third piece is just the quality of the data, you know? Yeah. In particular, the NNT of four- Mm-hmm that we talk about. I think when customers hear that number, it kind of hits them square between the eyes. Mm-hmm. Because an NNT of four, I can tell you in my twenty- Mm-hmm 5+ years in the industry, especially in cardiology, is unheard of. Yeah. The strength of the data, I think, really does kind of convey the belief. Mm-hmm. Let's not forget, you know, INPEFA has been studied on over 20,000 patients. Yeah. So, you know, SOLOIST is at the center. Mm-hmm. But we also have SCORED and other data- Yeah That's emerging, and I'm sure Craig will mention this. Yeah. AHA, just recently- Yeah We had new data talking about impact on MACE. Mm-hmm as well, and just speed of onset. Again, that is differentiated versus the other SGLTs. No, that's, that's helpful. I think, Jeff, you've done a really nice job on kind of giving all the metrics to kind of help us analysts, investors, kind of track the launch and get confidence in the launch. Do you foresee your disclosures and the way that you're going to share these items with us in 2024 to be very consistent with what we saw in 2023? Or are there other elements of things that you hope to share further with us that could help? Yeah, For the confidence. they will be consistent. Mm-hmm. As Lonnel mentioned, one of the things we're focused on is- Mm-hmm is coverage and Yeah - and access, and that's going to be one of the main topics- Mm-hmm that we talk about- Mm-hmm - with investors. We will also be tracking scripts. Mm-hmm. As you know, the IQVIA and Symphony- Yeah and like, pick up Mm-hmm - most of the retail scripts. Yeah. But there are also scripts that are- Mm-hmm ... that are being filled- Mm-hmm Through specialty pharmacy that are not being captured there, and so we'll provide that color and that additional information. So we'll update on the- Mm-hmm same kind of metrics that we've been using so far to demonstrate the progress of our launch. How do you envision, sort of your expansion of the product in terms of whether it is partnering it outside of the U.S. or maybe even thinking of taking it to the community gastroenterologist, rather than just in the hospital setting? So, like, what type of sort of- Yeah. So I can- Mm-hmm - talk about the partnering aspect. Yeah. But also, I want to be sure that where we're focused really right now- Yeah - is on cardiologists. Yeah. Cardiologists practice in hospitals- Mm-hmm and they have office practices. Generally, they do both. Mm-hmm. We're mostly focused on card... We reach cardiologists in their offices- Yeah Because that's the easiest place to get to them. Yeah. So, community cardiologists are- Mm-hmm are also the ones who are making- Mm-hmm decisions frequently- Yeah - for hospitalized patients. And, so we're addressing really all of the people that are the high prescribers- Mm-hmm for heart failure generally. Mm-hmm not just hospitalists Hospital or people that are in the hospital. And so, I think we have a good sized field force to be able to do that. That's not something that we need- Right to partner to be able to, to do. We're not really calling on primary care physicians- Yeah but they're not really- Yeah - driving heart failure treatment decisions. In terms of outside of the U.S.- Yeah We're having some discussions about some outside ex-US territories for INPEFA, as... Because that's not something- Yeah that we're going to do. It would be something we would do with a- Uh - with a collaborator. Is there a point, going back to the discussion you made, that your focus is on cardiologists? They practice both in community setting and hospital. Is there a way to actually track the scripts to see how much came from the patients that were, you know, hospitalized versus how many came from, you know, just heart failure, but not- So what I can tell you is, if you look at the 5,000 claims- Yeah that we spoke about Yeah At the end of Q3, given that for most new products in this category- Yeah there's a six-month new-to-market block- Yeah, yeah - in terms of hospital usage- Yeah the vast majority, in fact, all of that Yeah - usage- Yeah - was in the community, which again, I think is actually a very encouraging picture for us. Mm-hmm. Because, you know, if we think about the SOLOIST data in particular- Yeah - that's the hospitalized patient. Yeah. The patient who's been in the hospital with an acute heart failure episode, and then they leave on Empa. Mm-hmm. ... The fact that 5,000 prescriptions were already written- Yeah -outside of the hospital is really encouraging. Yeah. Because it shows that the value for INPEFA is being seen both within- Yeah and without, or outside of the hospital, as the patient is discharged as well. Yeah. So I think it clearly shows that the interest and utilization for the product is already there. And then, as we gain more formulary wins- Mm-hmm We go through the P&T process, which I can tell you- Mm-hmm -is happening in earnest now, we would anticipate that those numbers are only going to increase- Mm-hmm as we see patients coming out of the hospital Yeah discharged on INPEFA and moving into the community. Uh-huh. Thank you. And before we transition into other... I get this question all the time, is you guys have done a phenomenal job in terms of the studies, getting the product approved, getting the broadest label possible, getting already a successful launch under your belt, you know, besides, you know, being on the market for a pretty very, very short period of time, not even a little bit over a quarter. Mm-hmm. So, the questions that always come up is, like, there are quite a bit of pharma partners that don't have an SGLT2 in their portfolio. What is now the gatekeeper, right? They have done all these steps, like, so, so I get this. I would love to hear your - how you answer this, and I'm sure this will come up in quite a bit of one-on-ones. But yeah. Well, we think that we have, we're demonstrating value of INPEFA. Yeah. I think that as we demonstrate the value of INPEFA over time- Yeah that may change. So- Yeah ... we'll see. We'll see. Yeah. But, you know, we're focused on really launching successfully, and that we think that's going to be the most important value driver here. Mm-hmm. Yeah, I'm going to say something very controversial. Yeah. If I was a large pharma company- Mm-hmm ... I wouldn't touch this at this point until I see the inflection on this launch. Okay. When you see the inflection on this launch, then that sets up remarkable opportunity. Yeah. For us, I've been very clear- Mm-hmm ... this is not the year you're going to see that inflection. Yeah. What you're going to see this year is the huffing and puffing and getting access. Yeah. Right? Because that's the long-term win. Yeah. Then, when you get into the second half of next year, you have the- Mm-hmm ... the volume there. Then I think you'll start to see a real inflection point on the growth of this drug. That's when you - I think you'll lure in discussions around opportunities where we can partner in some ways. Mm-hmm. What I mean by that is, having a single product in your bag- Yeah is never efficient. Yeah. And so where I see partnering opportunities is this vast cardiovascular space. Mm-hmm. Could be an opportunity where we cross-promote- Mm-hmm ... where we can be more efficient- Mm-hmm -and use our capital better. And those are the areas where- Mm-hmm ... I think there's a better opportunity for us- Mm-hmm ... than, say, a large company coming in, trying to do what we're already doing. Yeah. Mm-hmm. Yeah. No, that's very helpful. Bates, just want to make sure it's clear, the inflection point that you see that could present itself is more likely to be the second half of 2024. Second half, yeah. We need to get access to the point that Tom's made this year- Yeah ... on the broad payer side. Mm-hmm. To Tom's point, also in hospitals- Mm-hmm ... you have a six-month moratorium on new drugs. Yeah. Right. We can't get in. Yeah. That six months is now expiring. Yeah. We have now knocked down three of the four GPO contracts. Mm-hmm. We have three of the four under our belts now. Yeah. Which means now we go into the IDNs- Yeah ... and we can start negotiating in earnest to get access into- Mm-hmm ... the hospitals. The 5,000 scripts you've seen- Yeah ... has come into the community. Yeah. We haven't touched yet where the real value proposition will be- Mm-hmm ... in those institutions. Yeah. Which is nothing but upside as we get into the second half of next year. Yeah, and that, that's where I'd go back to the one in ten patients- Mm-hmm ... actually leaving on an SGLT. Yeah. That is going to be an area of considerable growth, especially as the guidelines are adopted. Mm-hmm ... more broadly. No, that's great. And team, obviously, a lot of investors are also following the GLP-1 space, and the SELECT data became available. Could you maybe talk about... You know, obviously, they're going to file SELECT, but just sort of making sure people don't get confused on these two labels of- Mm-hmm ... the SELECT population versus the Empa population? Yeah. Yeah. Thanks for the question, Yas. Mm-hmm. I think the important thing- Mm-hmm ...to keep in mind is, as the guidelines, as Tom has mentioned, are changing- Mm-hmm ... I would move the SGLT class from a pillar- Yeah to the foundation. Yeah. All patients with heart failure should be on an SGLT inhibitor. Mm-hmm. I think, like the other pillars, there'll be a subgroup of patients- Mm-hmm ... that would be candidates for GLP-1s- Mm-hmm ... or other analogs. I think the other important element is that the GLPs, in general, have demonstrated value in reducing stroke and MI, MACE events. Mm-hmm ... not heart failure events. In fact, there are data that show in patients with HFrEF- Mm-hmm ... use of a GLP actually might be associated with more risk in heart failure events. Yeah. So I think if you're talking about a subgroup of obese patients with HFpEF- Mm-hmm ... which is where these trials have been done. Mm-hmm ... particularly to reduce MACE events- Mm-hmm ...not heart failure events. There could be and should be a role for those agents, but it's not going to displace- Mm-hmm ... at all the SGLT class. Yeah. The only other point that I'd add to Craig's salient points there is just about the cost benefit side- Yeah ... of this as well. I mean, if you look at the cost comparison- Mm-hmm ... of Empa versus a GLP-1- Mm-hmm ... and especially in the Medicare patient, where at the moment, CMS- Mm-hmm ... is obviously not covering these medications- Yeah ... you know, I think there's still some significant hurdles- Yeah ... that are in the way for broad adoption of GLPs within this space in particular. Great. Now I would love to transition into today's great news on PROGRESS. You know, announced the first patient enrolled. What did you disclose? You guys also had done a really nice job talking about the design of the studies ahead of time and the doses. Aside from the key milestone of dosing the first patient, was there any other elements of the trial that were disclosed that you want to talk about, that maybe you didn't get a chance to share with investors and analysts before, that you want to talk about? ... Yeah, yeah, as I think we've tried to take the approach to be really capital efficient- Mm-hmm. and de-risking the asset. Mm-hmm. I think that's the key takeaway, and I think the details are important to certain groups. I think for the overall investor- Mm-hmm ... We try to do things in a way that keep the timeline the same as they- Mm-hmm would be if we were to go right into phase III. Mm-hmm. But de-risk and reduce costs significantly and sort of shift costs out- Mm-hmm - as we get more information. So by doing a phase two dose optimization- Mm-hmm you take your phase III programs from a three- or four-arm study- Mm-hmm - with two arms. Yeah. We've really zeroed in over this past year with the pharmacokinetics- Mm-hmm and really looking at what are the doses that we think really bound, where the benefit risk will be. Mm-hmm. By taking down the induction arm, that first day dose- Mm-hmm We already know that most of the adverse events were associated early in the dosing. Mm-hmm. So the benefit risk will be much better. We learned so much in the phase II study about how do we reduce screen fail? Mm-hmm. How do we increase enrollment? Yeah. We have more academic sites. Yeah. We have the president of the ADA as the PI of the study. So all of these things, having a long-term extension trial- Mm-hmm not only shortens the timeline Yeah but also is a great inducement for patients. Mm-hmm - to join the study. Yeah. Everyone's gonna have access- Yeah to the product. So, you know, when you look at a time and capital allocation- Mm-hmm We believe it is a much better way to go. We've already gotten feedback. Yeah - from KOLs, from- Yeah - FDA consultants, and from the FDA itself. Yeah. Now, with the study being kicked off, have you guys thought about how soon you could... You know, this is a large market opportunity- Mm-hmm Very limited competition and development. How soon could you get enrollment under your belt? How could you get data in 2024 or more like 2025? Like, how you're thinking about sort of the, the data, data release? Well, we've done several things to increase- Mm-hmm - enrollment, so we're looking at getting over 400 patients- Mm-hmm - with moderate to severe pain. Mm-hmm. We're again being laser beam focused- Mm-hmm so we can minimize a lot of the variability- Yeah - that sinks so many pain studies. Mm-hmm. We significantly increased the number of sites, and we publicly- Yeah mentioned that, where we had about 45 sites in the pilot study. Mm-hmm. We're at 100 sites, all in the U.S. Again, we are qualifying and utilizing our best-performing sites in the first trial. And again, I think the overwhelming interest of them- Mm-hmm to participate in this trial, again, is a reaffirmation of this is a- Yeah Good trial. This is an agent that- Yeah They're interested in. So we've taken all of that to try to increase enrollment. Mm-hmm. But, you know, right now, the numbers that we've committed to is finishing enrollment in about a year- Mm-hmm is already a pretty, pretty heavy lift. Yeah. But I think we feel confident in that. Mm-hmm Based on what we've learned, and I think getting that screen fail. Yeah. You know, we had a 60%-65% screen fail- Mm-hmm - in the first set of studies. We think we can manage that better. So again, we've had a- Yeah challenge internally of how can we go faster and- Yeah Certainly we have an upside. Yeah. To be honest and to sort of give a conservative- Mm-hmm but stretched target Mm-hmm of having data in second quarter of 2025 is Okay. I think, yeah, what I would add is, and I, I talked to this when we did the Phase II-A study. Mm-hmm. I appreciate speed. I really do. Yeah. But I appreciate a successful trial better. Yeah, yeah. And so we have to balance those two- Yeah to make sure all the elements that we learn in that II- A- Yeah, yeah that we are purporting that into Mm-hmm this II-B study. And then, to Craig's point, how do we do that and still stay on a timeline as we would in the phase III? Yeah. I think it's quite innovative and remarkable- Mm-hmm What the team is doing, but my message really is, let's make sure the quality- Yeah that we want to bake into this- Yeah - gives us the confidence that we're gonna get a successful outcome- Yeah Like we just did. This is important because you asked for reasons to believe. Mm-hmm. This is the first compound I put into the clinic- Mm-hmm - as a CEO when I came in 10 years ago. Yeah. To nurture it out of the partnership with BMS- Yeah From discovery, and now have it in the late stage development. Yeah. There's not been a new development in this area for over 20 years. Yeah. Equally important is, there hasn't been a successful neuropathic pain... Yeah - study in Phase II in over 20 years. Yeah. LX9211 has now broken that mold. Mm-hmm. It's now been successful in II-A Mm-hmm. All that's left for us is to optimize this so we can- Yeah increase our confidence Got it - in a Phase III and what we can deliver into- Yeah a commercial market. Yeah. Given... No, thank you, Lonnel, and a lot of investors appreciate that, that meticulous, you know, taking risk off the table through each execution. The question comes up is, like, given the size of this phase II-B, and given the size of it's the phase II-A, is there-- have you negotiated or discussed with the FDA that maybe this could be deemed positive, be served as one of the registrational, or could maybe require a smaller size of the two pivotal studies in, in one way? Yeah. It's a great question, Yas, and actually it is. Okay. That extension study, that is gonna be the long-term safety data already. Okay. So that, at a minimum- Mm-hmm - is something that has already been discussed. I think it'll certainly be a very important- Mm-hmm supportive trial of what we're- Mm-hmm - expecting now would be II parallel phase III- Mm-hmm - trials with a single dose. Mm-hmm. So it would certainly, if the study is positive- Yeah we all hope, that would be a supportive trial along- Yeah with the overall other two Yeah phase three studies. But the long-term safety is gonna come- Yeah - from this trial. Thank you. And maybe this question is for you, Jeff. You know, I think, you know, reminding our investors of the current cash, cash runway, how to balance, you know, running, you know, phase IIF well-designed study, while also really building out really continued commercial success until really INPEFA has full access. So how do you foresee sort of, you know, cash, cash runway, cash events? Yeah. Yeah. So at the end of this past quarter- Mm-hmm we had a little over $218 million in cash and- Mm-hmm in investments. We have a financial- Mm-hmm - arrangement with Oxford Finance- Mm-hmm - That gives us some additional capacity there. Mm-hmm. We are expecting to have that cash and cash runway to be able to get us into 2025. Part of what you're asking, I think that's one of the reasons why we were wanting- Mm-hmm to be very capital efficient- Mm-hmm with the LX9211 Yeah program and why we're taking the approach with that program Mm-hmm - that we are. Because I think we can create a tremendous amount of value- Yeah but we need to be prudent- Yeah with the way that we use our resources Mm-hmm - to be able to continue to invest appropriately in the launch of INPEFA as well. Mm-hmm. Perfect. Well, team, we have come to 25 minutes, flew by discussing this. You've had a phenomenal 2023, and really the best of luck and great things are happening in 2024. So just want to say thank you on behalf of all of us here at Piper Sandler. Thank you. Thank you.