Good afternoon, ladies and gentlemen. Welcome again to the 41st annual JP Morgan Healthcare conference. My name is Edwin Zhang. I'm a part of the JP Morgan Healthcare Team in the MSM banking side. Today, our presenting company is Lexicon Pharmaceuticals. Our presenter today is Lonnel Coats, who is the Chief Executive Officer for the company. Please join me in welcoming him. Also on the panel we have Jeffrey Wade, who is the Chief Financial Officer, and Craig Granowitz, who is the Chief Medical Officer. Edwin, thank you so much for the introduction. Thank you to all of those who have tuned in to hear the presentation about Lexicon's progress. As always, I make these presentations on behalf of the extraordinary men and women at Lexicon that work tirelessly every day to advance our innovations into the hand of patients. Today, I'll be making forward-looking statements. Some of those statements will contain risk. Our risk are outlined in our SEC filings. I would encourage you to take a look. This is a remarkable year for Lexicon. This is truly a transformative year for Lexicon. We will be introducing upon successful approval of sotagliflozin for heart failure. We'll be introducing the first dual SGLT1 and SGLT2 in the marketplace for heart failure. We believe based on the conversations that we're having with the FDA, we will be on track for our PDUFA date in May of this year. We also believe based on our data, which I'll talk to you a little bit about later, particularly our SOLOIST data and the unique population that's in that data, we expect to get a unique label. This is important because I've stood here for three years and talked about the market is going to explode, and it will be driven by the SGLTs. Well, I think anybody who's paying very close attention, you can see that explosion happening. The market is growing quite rapidly and getting bigger every day. We will be launching into a rapidly growing, expansive market, which there's plenty of room with a unique label to introduce sotagliflozin. The second thing that makes this such a remarkable year for us is that after many years of tolling, of looking for new targets, particularly in the area of CNS, we brought forward LX9211. It was a theory a number of years ago. Today, we've put it into the clinic, and I'm very pleased to say, which I'll share with you later, is that LX9211 has not shown strong activity in just one part of neuropathic pain, but two indications of neuropathic pain. We are in a very unique place today, in rarefied air, where we have shown success in the area of neuropathic pain, which is also a large and expanding market, particularly given the opioid crisis this country faces. Let's jump right in and talk about it. This is a slide that if anyone who's followed Lexicon has seen me put up for probably the last three years, and it wasn't what Lonnel said, it's what the global data shows, is that in 2018, the market was somewhere around a little less than $4 billion. It was projected that by 2028, the market was going to grow to somewhere around over $20 billion with a 19% CAGR. Here I am standing a number of years later and these numbers are wrong. The market is growing even more rapidly and more expansive. What is correct that they predicted, this growth will take place because of the adoption of SGLTs. That has proven to be absolutely correct. The opportunity, as I said, is large and is growing in terms of heart failure. In terms of prevalence, there's 6.2 million people in the U.S. with heart failure. From an incidence point of view, there's about 1 million new heart failure cases annually. What's interesting here is that the growth rate is about 46% increase in Americans living with heart failure through 2030. That is a significant growth rate, which tells you that there is a remarkable need and will continue to be a remarkable need for innovative products like sotagliflozin. If we whittle this down and say a subset of that market is worsening heart failure, and this is when a patient shows up in a hospital and they can't breathe and they feel like they're drowning. There's an urgent event that happens here. Interestingly enough, it is the number one cause of hospitalizations for Americans older than 65. There are about 1 million hospitalizations for heart failure annually in the United States. Here's a staggering number. 25% of patients are readmitted to the hospital within 30 days of being discharged. 65% of patients are readmitted to the hospital within one year. Again, what this tells us is there is a remarkable opportunity for innovation like sotagliflozin. It's not just Lonnel saying it. The innovation that we have put forward was now put into publication concurrently in The New England Journal of Medicine. The first study is the SOLOIST study that was remarkably unique, that looked at intervening with patients who are hemodynamically stable in the hospital and starting care in the hospital setting or immediately following the hospital. That's what makes this study so unique. The second study was looking at patients at risk, patients who had chronic kidney disease, and following those patients on a chronic basis. These data were remarkably successful. However, today, I'm gonna really focus on the SOLOIST. Now, SOLOIST was presented at the American Heart Association scientific session last year, November 6th, by Bertram Pitt, really looking at sotagliflozin as the first dual SGLT1 and 2 in cardiovascular mortality and hospital readmission rates for heart failure. Go back to the slide I showed you earlier, the level of readmissions that happen in this space. Why is that important? It's important because when you look at this slide, what you see is that the patients who are on sotagliflozin in the SOLOIST program for total cardiovascular death, excuse me, hospitalization for heart failure and urgent heart failure. These patients, the vast majority were already on standard care. Could be an ACE, an ARB, an ARNI, and in some cases, an MRA. Even when those patients came in, they still had an event, at least one event over 18-month period. You put sotagliflozin into the mix, you see a hazard ratio of 0.67, a 33% reduction on top of standard care. Equally important, the number needed to treat, meaning that the treatment patient used to avoid one event is four. That is remarkable. Why is that remarkable? You look at the data and break it apart a little bit and look at the first 30 days, you see a 50% reduction, you carry out 90 days later, that 50% reduction holds. Why is that important? If you want to avoid readmission, bring down cost of care, and increase overall care for patients in this section, sotagliflozin could be the answer, and certainly, that's how we would advance it. The other thing that was gonna be really remarkable for us is we'll be launching sotagliflozin into a market that has now adopted SGLTs as a critical pillar of care in the standard of care for heart failure. This is when you really wanna be coming into the market when there's an adoption of the, of the therapeutic category that you don't have to fight that. Whether it's the AHA or ACC or HFSA, they have all collectively have adopted SGLTs as a critical part of standard of care. Why do I talk about the hospital so much and the uniqueness of the SOLOIST study and sotagliflozin and how it performed? Here's what we know. If you intervene with treatment options in the hospital, when you look 60-90 days later, they're still on therapy. When you look 12 months later, if you intervene in the hospital with the appropriate care, a year later, the majority of patients are still on therapy. This is critically important because the only compound that have shown this in a population like this with the SOLOIST program is sotagliflozin. We also know that when we look at what happens when a patient goes in the hospital, who takes care of them? Where are these institutions? You know, are they diffuse? Are they all over the place? The truth of the matter is they're fairly well concentrated. This is very, very important because we can deploy a sales organization, a commercial organization equal to the size of those competitors who are in the market today that are primarily focused on cardiovascular medicine. We don't have to have an army of primary care reps. What we really have to have is a very focused field force going out after where the business is and being competitive. With that being said, let me move on to the next big event for Lexicon. It's LX9211 for neuropathic pain. Eight years ago, when I started this company, Lexicon is so rich with targets. You know, I almost got overwhelmed at everything they were presenting to me. I tell you what stood out. Is this compound, LX9211, that was in a discovery alliance for 10 years with Bristol-Myers Squibb. My concern was, given the focus of our partner at that time on immuno-oncology, this would get lost. With the help of the board and the support of the board, we negotiated and pulled this asset out and took full custody of it and advancing it forward. I'll tell you why this was important. What we know is AAK1 is a novel target for neuropathic pain. It is APT or associated protein kinase one, a very unique target that certainly came out of the alliance. We know that AAK1 knockout mice were resistant to the development of neuropathic pain. This drug was developed for neuropathic pain. It wasn't by serendipity. It was created for it. The mechanism of action, we know it does not involve the opioid pathway. This is extremely important given the need for alternatives to opioids. We also know that it does, excuse me, that it does involve the adrenergic receptor pathway. To the right, what you see is just one of the preclinical models that clearly show that LX9211 and the mice that were in this study had resistance to pain relative to the wild type. Very potent, very powerful, and that's what gave us energy to move forward into clinical development. When we get into clinical development, we're very pleased to say that we're poised to now advance this compound into late-stage development because we didn't make the decision to just study it in one indication that makes up neuropathic pain. We chose to study it in two. The first one is diabetic peripheral neuropathic pain. That is the lion's share opportunity in overall neuropathic pain. The second one, which is a totally different population, is postherpetic neuralgia. Very small population, if we run a small study, we can get an indication. Can we expand the opportunity with this beyond just diabetic peripheral neuropathic pain and go after a broader neuropathic pain indication? That's what we had to understand in the phase II work that we were doing. Should we be successful doing it? We have the potential to be the first major drug innovation in many, many years to introduce a new therapy in a large polySER neuropathic pain market. Let's talk a little bit about the studies we ran. For diabetic peripheral neuropathic pain, we had a two-week screening period followed by a single-blind placebo run-in period. Certainly later, Dr. Granowitz can explain why that was important. Then we had a six-week double-blind treatment period where patients would be randomized to either the high dose, 200 mg loading dose followed by 20 mg daily dose or to the low dose, 100 mg loading dose on day one, followed by 10 mg daily dosing or the placebo arm. After the treatment period, we then initiate a five-week single-blind safety follow-up period to assure ourselves that we have a safe compound. The results, I am very pleased to say, in a field littered with failure, many have toiled and tried to find a way forward in neuropathic pain. Many have unfortunately failed. For the basis of being able to advance something that could be important to patients, I feel very proud to say we achieved the primary endpoint. Now, if you look at this very carefully, you'll see that placebo, there was a placebo effect of 0.72, and that was met with a significant effect by the low-dose treatment arm of 1.39 points drop in the average daily pain score or ADPS and the high dose dropped by 1.27. The statistical significance came from the low dose. What did we learn? We learned that the high dose, you know, the effect tapers off, therefore you don't need the high dose to get the effect. What you do learn also is that the high dose gives you a higher AE profile. That allows us to focus on the low dose, and we now feel as though we have a dose we can take into the clinic further. Let's look at the data. What's so powerful about this data is the effect happens in the first week, and it doesn't wane. That effect is sustained every single week of the treatment period. Every single week of the treatment period. This is very, very important for patients who are living with diabetic peripheral neuropathic pain, and we're very pleased to be able to show consistency of delivering an effect every single week that they were on the treatment. When we pull out some of the aspects that are important to a patient who's living with diabetic peripheral neuropathic pain, one of the major issues they have is burning pain. We looked at it. You can see that there was a drop of 0.49 for patients on placebo, but look at the drop with patients who were on the treatment arm, particularly the low dose of 1.89. Very, very powerful that you want to take a drug like this into market that can reduce burning pain. The other thing that's very, very important to patients living with peripheral diabetic neuropathy is sleep. Sleep interruption. You see that there was a 0.48 drop patients on placebo and a 1.45 drop patients on the low dose. Clearly this drug was doing something remarkable in improving the overall care of patients who are living with diabetic peripheral neuropathic pain. The other measure you wanna look at is we allowed there to be rescue medications for patients if they couldn't hold up on their own with the therapies that they were on. What you see here, the top line is the, in the blue is placebo. All throughout the therapy, there were higher use of rescue medications for placebo. Again, validating an active drug, particularly the low dose arm. Let's talk about the second study. We ran a second small study to try to validate, do we see consistency in terms of LX9211 having the ability to be able to reduce pain. Very similar to the previous study, except this was a very small study of I think 79 patients. There was a two-week screening period followed by a single blind placebo run-in period, and then instead of being randomized to 3 doses, we were pushing a dose to see what the high dose looked like in a different population. They were only on the 200 mg initial dose, followed by the 20 mg daily dose or they were randomized to placebo. Again, what was important to us is that the treatment period was followed by a five-week safety follow-up period to ensure we were collecting safety data. What are the results? The measurement was changed from baseline and ADPS at week six. You can see there was a significantly bigger placebo effect in this population, but it was also a significantly bigger effect for patients who are on the treatment arm. For placebo, you had a 1.62 effect. Certainly for LX9211, you had a 2.42 effect. At week six, this was not statistically significant. What I will tell you when you look at that separation of 0.8 difference that you see here... Let me move to the next slide. You see that 0.8 difference got carried forward in every single week. There was not a waning of effect. You lost a little bit of that on week six, but if you average out over these eight weeks, you will have a statistically significant drug. It tells you it's powerfully active, and that's what we were looking for in this proof of concept study, in this small proof of concept study. Consistency. You're doing all of this work, what you wanna see when you're running two phase II studies, you need to see some consistency. What I've done here is I've taken the RELIEF-DPN-1 study and the graphs that you see here, even with the error bars, and I've put it on top of the PHN data. Looks almost the same. The effect happens in week one. That effect is carried out across every single week. What did we learn? We also learned the 20 mg dose leads to higher dropout rate and is not an appropriate dose. We learned that the 10 mg dose is the dose that we should be looking at. Safety and tolerability. The adverse event profile was consistent across both programs. Again, consistency. The treatment-emergent adverse events were generally mild to moderate. There were no drug-related serious adverse events, so we have a pretty clean drug. I will tell you the number 1 reason people dropped out, it was dizziness. We believe we can solve that problem by stepping away from that high dose and then doing the work around both the initial dose and the daily dose of the 10 mg dose. We think we have a way to go forward and go into phase III for the opportunity. Conclusions. AAK1 inhibition is more than just a potential new mechanism of action, but it's a potential new therapy for multiple neuropathic pain conditions. That allows us to think about developing this compound more broadly than just for one, for one area of neuropathic pain. We also believe that the data supports, as I said before, to advance the 10 mg dose. It is a very effective dose, and it gives you that balance of safety and efficacy that you wanna look for of anything you wanna take into the market going forward. The planning and preparations for phase III development is underway, and we couldn't be more pleased. Let's talk about this market opportunity. Well, if you look at diabetic peripheral neuropathic pain, there's about a little over 12 million patients around the world with it. When you look at postherpetic neuralgia, there's a little over 590,000 patients. Those are a small part of neuropathic pain, but no less important. If you take it over to the United States, there's 5.7 million Americans with diabetic peripheral neuropathic pain. There's over a quarter million Americans with postherpetic neuralgia. We look to the right in these boxes, you'll see even today, with the therapies today, there's still a substantial portion of the population out there that's getting no therapy. That is an opportunity, and there's an opportunity for those patients who may not be getting the best therapy. My conclusion. One is that our financial balance sheet is strong in terms of our ability to fund what's near term for us. What I just laid out to you, we have $136 million at the end of the third quarter. We drew down, if you recall, we had a $125 million debt facility, with Oxford Finance, and we drew down $25 million of that in December. That means we have a $100 million facility remaining that should we choose when we go to launch sotagliflozin, we'll be in a good position to enter the market the way we need to enter the market. Let me end with the way I started. This is a remarkable year for the stakeholders of Lexicon. We have advanced sotagliflozin through many odds, many challenges, to a place now we're pretty confident we're on our way to an approval. We're also confident through our negotiations we have the chance to get a very unique label in a population that is remarkably underserved today. If we intervene at the point in which patients are in the greatest need, which is in the hospital setting, and we're the only one that did the work to do... to be able to say that with our clinical program and profile, then when those patients leave the hospitals, most likely they're gonna stay on our therapy long term to get the benefit. It also, if we avoid readmission, it brings down cost to the healthcare system. We're very proud. This market for heart failure will only grow, and the need for innovation will grow with it. We're very pleased that we will be one of those innovations that addresses the need. Lastly, LX9211 and this great journey that we've been on in the last eight years that I've been here, to see it achieve everything that we thought it could achieve, going all the way back to preclinical, looking at the data and what we thought it could do. The profile of this compound has been consistent all the way through, not just with one indication for neuropathic pain, but now two. Our job is to try to figure out how we're gonna get this into phase III and keep moving forward. A remarkable year for Lexicon and our stakeholders, and I certainly hope you feel that way too. On that note, Ed, I'll stop there and turn it over to you. Now we have the Q&A portion of the presentation. If anyone with the audience would like to ask a question, please feel free to do so. Thank you. Yeah, definitely excited, exciting year ahead. I had one question about the indication for sotagliflozin. Is that gonna be with heart failure with diabetes or heart failure with or without diabetes? I noticed SOLOIST was done in people who had diabetes. Stay tuned. We do expect, that we will get a broad label within heart failure, based on the work that we've done so far. We have, you know, to your question, it wasn't just a push from us, but I do think the agency when they look at the data and they look at how the data performs in patients with diabetes is no different. Heart failure is heart failure. Diabetes is just, you know, one of the factors. Those factors also exist for patients who do not have diabetes. If we make the argument that we think we can make, to Jeff's point, we would expect a broad label. Thank you. I just had one or two other questions. Could you speak at all to any plans about sotagliflozin outside the U.S.? We don't have any intention of commercializing outside the U.S. on our own. We don't have the intention of building that infrastructure. We are thinking about going back and having some further dialogue with potential partners outside of the U.S. after we've established the approval in the U.S., and that was the strategy for ex-U.S. on sotagliflozin. Then my last question is, are there any updates with type one diabetes? Is that something Lexicon is still thinking about or, what's happening there? Yep, we're still thinking about it. We hope to be able to circle back to that at some point in the not too distant future. We do believe that sotagliflozin has potential to benefit people with Type 1 diabetes. We do need to find a path forward with them, with the regulatory agencies to make that happen. I would say also that the fact that we're seeing the benefits with sotagliflozin in the broad population for cardiovascular disease is one of the reasons why we may be able to find the path forward, because right now, people with Type 1 diabetes are really gonna be the only category that can't use agents like sotagliflozin, and that's something that we may be able to change going forward. All right. Thank you, team. I have a couple questions from my side. Could you sort of elaborate on the expected timeline for LX9211 going to phase III, and what are some of the plans around that? Craig, you wanna take that? Certainly. We really believe that we have a dose, as Lonnel mentioned, we have a maintenance dose of 10 mg per day that provides an excellent benefit risk ratio. We believe based on the discussions we've had with a number of different stakeholders, that we are ready to move into phase III. The plan is to finalize our dialogue with the FDA in the first half of this year and begin dosing for a pivotal phase III program before the end of the year. Thank you so much for that. Yep. Okay, great. The second question I have is in regards to sotagliflozin, can you sort of talk about the expected commercial footprint upon the launch of the product, in terms of market penetration and kind of the projection for growing that footprint, the growing market penetration in the coming years? Jeff, you wanna take that? Sure. We expect that we should be able to address this market with a relatively modest size sales force. I just wanna about where we are in this process right now. We've already put together all of the infrastructure and the team, except for the first line sales reps at this point. We have the people on board, they're out working, we're talking to payers, we're talking to key opinion leaders and physicians. We are already laying the groundwork and getting prepared for launch. The strategy that we're taking, where we're focusing on this transition of care patient, the patient who's hospitalized and then is transitioning to chronic care out of the hospital, means that we'll be able to focus on a relatively small number of cardiologists who are making the treatment decisions in that transition of care setting. We don't have to have a large primary care sales force and a field force that's much more modest will be adequate. We'll be bringing in that team as we get closer to the PDUFA date. Thank you so much for that. Follow-up question for that. In terms of the Lexicon platform for sotagliflozin, how does the drug create differentiation versus other heart failure drugs on the market? Can you sort of talk about the mechanism, sort of the benefits over existing drugs in the industry? It's a perfect Craig question. Thank you. Really on several different levels. First was the differentiation of the clinical development program and a real focus on heart failure, not trying to have a very broad set of populations like the SGLT inhibitors, looking at diabetes and type two diabetes and the reduction of A1C, chronic renal disease, and then a broad and not specifically targeted heart failure indication. Second is uniqueness of data. As Lonnel mentioned, that SOLOIST data, really looking at a number needed to treat of four patients and a 50% reduction in 30-day hospital readmission rates is unique. There is no other agent in the SGLT class with that data. The third is the biological mechanism of action and the incremental value of inhibition of both the SGLT1 and the SGLT2 receptor. As a reminder, SGLT1 receptors are present in other key tissues in the body that are not where SGLT receptors are, which is SGLT is only in the kidney. SGLT1 is not only both in the kidney, but also in the gut, in the heart, and in the brain. It's by no surprise then that we're seeing unique signals in speed of benefit in reducing heart failure readmissions and also with data that Lonnel did not have time to talk about today in at-risk patients reducing stroke and myocardial infarction, which again has not been demonstrated by any other SGLT2 inhibitor. You have clinical program, you have clinical data, and you have biological mechanism of action. Thank you so much for that. I think, you know, thank you again for the Lexicon team today for discussing their latest progress. Just another round of applause for them for joining us today. Thank you. Appreciate it.