Welcome to the Lexicon Pharmaceuticals Business Update conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a brief question-and-answer session. As a reminder, this call is being recorded today, November 22nd, 2024. I will now turn the call over to Lisa DeFrancesco, Head of Investor Relations and Corporate Communications for Lexicon. Please go ahead, Lisa. Thank you, Liz. Good morning and welcome to the Lexicon Pharmaceuticals Business Update conference call. Joining me today are Mike Exton, Chief Executive Officer and Director, Craig Granowitz, Senior Vice President and Chief Medical Officer, Brian Corrigan, Senior Vice President, Regulatory and Quality Assurance. Earlier this afternoon, Lexicon issued a press release, or earlier this morning, excuse me, Lexicon issued a press release, which is available on our website at www.lexiconpharma.com. A webcast of this call is also available on our website. During this call, we will review the information provided in the release and then use the remainder of our time to answer your questions. Before we begin, let me remind you that we will be making forward-looking statements, including statements relating to the safety, efficacy, clinical development, regulatory status, and therapeutic and commercial potential of Inpefa, Synquista, LX9211, LX9851, and our other drug programs, as well as our business generally. This call may contain forward-looking statements relating to our growth and future operating results, discovery and development of our drug candidates, strategic alliances and intellectual property, as well as other matters that are not historical facts or information. Various risks may cause our actual results to differ materially from those expressed or implied in such forward-looking statements, and we refer you to our most recent annual report on Form 10-K and other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Exton. Thanks, Lisa. Good morning, everyone. Thanks for joining us on this important update call. Today, I want to address some important changes regarding our future at Lexicon. You may have seen earlier this morning we've announced a strategic restructuring of our company following the recent regulatory update we received from the FDA concerning our Synquista application. We've received a Deficiencies Preclude Letter from the FDA indicating deficiencies with the application that preclude discussion of labeling and/or post-marketing requirements and commitments at this time. Now, this effectively ends any current discussion on labeling or post-marketing requirements, which means Synquista will almost certainly not be approved for this indication. Lexicon cannot currently sustain a commercial function on the Inpefa heart failure business alone, where we still face significant market access challenges. Therefore, without the anticipated launch of Synquista in the near term, we are eliminating our commercial operations and rationalizing resources across all functions. Unfortunately, this means a reduction of approximately 60% of our workforce, effective for most affected employees, by the end of this year. These changes are expected to reduce our 2025 operating costs by $100 million. This amount is in addition to the $40 million in expected 2025 cost savings announced as part of our realignment in August. While this was one of the scenarios we were preparing for as a company following our advisory committee vote, it certainly was not the one that we'd hoped for. We're committed to supporting everyone impacted by these changes during the transition. Inpefa will continue to be manufactured and made available to patients who depend on it, and we will maintain a necessary level of support to ensure that patient care remains uninterrupted. Now, as a part of this change, Tom Garner, our Chief Commercial Officer, will depart Lexicon. Tom joined Lexicon over a year ago and built a first-class commercial organization with significant talent across the board. I do want to express my sincere gratitude to Tom and to the commercial team for their hard work and dedication, some who have spent years working on sotagliflozin for heart failure and were excited at the prospect of pivoting to type 1 diabetes and bringing sotagliflozin to this important community as the first new adjunct to insulin in over 100 years. Your efforts have not gone unnoticed, and your commitment to our patient community is truly inspiring. I also do want to take a moment to acknowledge the outpouring of support from the T1D community that has been both inspiring and unwavering. To the T1D community, please know that our teams at Lexicon work tirelessly on this resubmission with the goal of being able to provide access to sotagliflozin for people with T1D and CKD. Now, despite these challenging adjustments, I want to emphasize the exciting opportunities ahead for Lexicon. Our decision to focus on our clinical development pipeline is driven by a commitment to advancing therapies with the greatest potential for patient impact and value creation. We're concentrating our efforts on several promising programs, including two major late-stage development programs: the phase 2b PROGRESS study evaluating LX9211 in diabetic peripheral neuropathic pain, with top-line data anticipated in the first quarter of 2025, and the pivotal phase 3 SONATA HCM study for sotagliflozin in hypertrophic cardiomyopathy, with enrollment underway. We're progressing IND- enabling studies of LX9851, a novel small molecule candidate for obesity and associated cardiometabolic disorders. And we're also advancing early-stage opportunities for 9211 and LX9851 in additional indications, which we will talk about more soon. And as I stated in our recent earnings call, exploring strategic partnerships to advance and accelerate the value of our pipeline will be a pillar of our strategy moving forward. We believe these efforts will allow us to leverage our first-class clinical development organization to advance our pipeline, reflect our commitment to delivering innovations that fit our Lead to Succeed strategy, and meaningfully benefit patients and position Lexicon for future growth. So, in closing, while today's news is difficult, it's an essential step towards a more focused and promising future for Lexicon, which we will look forward to discussing with you in more detail over the coming weeks. I'm confident that this decision, our strategy, and the potential of our pipeline towards delivering impactful therapies and drive future growth. Thanks for your continued support and dedication, and we'll now open the floor to questions. If you'd like to ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Yasmeen Rahimi with Piper Sandler. Yep, good morning, team. Thank you so much for all the great updates. Could you kindly, I guess, give us an update? How much of the resources will be spent towards the program of diabetic nephropathy versus the commitment on HCM and with data upcoming here? One key in terms of preparation into the data readout, what do you hope to achieve? What's the bar for success? That would be really helpful. I know this is a very tough decision to make, but I want to maybe look forward instead of looking to the past. I respect the hard decision you had to make and want to get your color on sort of prioritization on these programs. No, brilliant. Thanks, Yaz. And let me start off, and then I'll ask Craig Granowitz to comment on the trial itself. So, independent of these changes, we were fully resourced to complete the 9211 progress study, which, as you know, is very close to enrolling its final patient through to Q1. We're actually now looking across the board at how we really double down, accelerate that program and the varying additional programs, and Craig can talk about those. We haven't finalized any additional studies or anything at this time, but as we start to think about that, we will communicate it. And the same is true for the HCM study. In fact, that was budgeted into our going-forward financials. And so, really, at the moment, these cost savings that we see truly are preserving us additional cash runway that, as you stated, we can invest to double down on these really important future assets that we truly believe in. And to some degree, now we will have the ability to talk about the impact that these medicines truly can have in the near and long term. And so, perhaps I'll ask Craig to comment around the actual PROGRESS study and what we expect to see with data coming out in Q1 of 2025. Yeah, thanks, Mike. Great question, Yaz. I appreciate the question and the sentiments. Thank you. We are looking at several different ways to further accelerate the 9211 program, really looking at, well, first of all, we've accelerated enrollment and completion of the trial by a full quarter. And I think that is also a reflection of the interest in the molecule and the ease of enrollment, which was one of the design characteristics we built into the study to begin with, having the addition on top of existing therapy, the simplicity of the overall design, and the feedback we learned when we did the proof-of-concept study. There are a couple of areas that we're looking to further accelerate the start of phase 3, and I think we can share with you over time as we finalize those what those are, but I think they are additional things that we had thought about doing. But if there are more resources that we can put against that, those, I think, are things that we're looking at. There are additional indications that we're also potentially looking at accelerating in parallel to what would be the critical path for DPNP filing. On the HCM study, we had already made the decision over the summer, and I think we'd already communicated that, that we added additional U.S. sites to the trial, and the startup of the trial is going really quite well. I think you saw some of the presentations of that at the HFSA meeting and HCMS meeting. I think at AHA, there was quite a bit of interest and discussion regarding the protocol and interest in participating in the study as well, so we are really looking at a number of different opportunities, and as Mike mentioned in his prepared remarks, the data generation we have with ongoing IISs regarding both the mechanism in HCM, the mechanism and advantages of dual inhibition of SGLT1 and SGLT2 on stroke and MI, where there was data presented both at AHA and will be at upcoming medical meetings, the effects directly on the myocardium, all of that in the drug supply that we are providing to a number of independent IISs, all will continue unabated even after these changes. Thanks, Craig. And finally, Yaz, a couple of points to make. As we said, now we can squarely focus our attention on the pipeline and really, I think, explain the value that we see that perhaps others at the moment don't, particularly for 9211. And we plan to have an investor call in January post-JPM to really explain what we are expecting from the 9211 study, what that would mean clinically, because I think because our program is placebo-controlled and with a run-in, folks are probably not appreciating the level of pain reduction that you see in this program versus other programs that are not placebo-controlled. And it's important that we truly explain in detail what we're achieving with 9211 and what a successful progress study would look like. So looking forward very much to describing that to our investor community. Thank you, team. And looking forward to 2025. And see you soon at our conference. Thanks so much. See you, Yaz. Our next question comes from Roanna Ruiz with Leerink Partners. Hi, good morning, everyone. So I was curious, could you elaborate on what functions are remaining to support Inpefa prescribing with current patients? And what's your outlook on Inpefa sales going forward with the commercial team reduction? Yeah, great. Thanks, Roanna. So although we are eliminating the commercial function, there are a few folks that will remain to continue, for example, the things like contracting with the PBMs, to continue our patient access program, to continue supply. All the things that you would need to ensure that Inpefa remains in the marketplace will continue. So no change there. We would expect that because we will no longer be promoting Inpefa with a commercial team, that sales will remain flat. Although we do have a committed base of prescribers, and we will continue to engage with high-value, important key opinion leaders through our medical team, because actually we have a lot of studies ongoing, both some funded by us, but mostly funded by third-party sources who still see the value of sotagliflozin not only in heart failure, but in HCM. So all of these contacts will continue the Inpefa engagement and noise because, in fact, we believe in the long-term value of Inpefa, and particularly as we see the importance of SGLT inhibitors in HFpEF and the need for an SGLT inhibitor as one of the key cornerstones of treatment in that particular condition as we march towards our HCM readout, and as we see the competitor SGLT2 inhibitors be affected by genericization and by the IRA in 2026, that in fact, the long-term value of Inpefa still remains, so our aim is to continue a presence, albeit without promotional activity, but certainly a presence scientifically and one that will absolutely maintain that patients can continue to get Inpefa. That's our absolute commitment as a company, and so that's how we'll go forward. Got it. Makes sense. And then secondly, I wanted to ask about the DPNP study. So once you read out the results, could you talk about your immediate next steps? And will it include a follow-up meeting with the FDA? And could you remind us, what has FDA feedback been so far for this program in terms of the color of their questions or how you worked with them over time? Yeah, I might turn that initially to Brian Corrigan for what our immediate next steps with the FDA would be. And then Craig Granowitz, who's had the background information as well on interactions thus far. Brian? Yeah, sure. Thanks, Mike. Brian Corrigan. So when we do get the top-line results from the phase 2b PROGRESS study, we do intend to seek an end-of-phase 2 meeting with the FDA. That meeting will, of course, include discussions around what the pivotal phase 3 program will look like. So we intend to move forward with that as soon as we have the results. Yeah, and it's Craig Granowitz. And I can further elaborate beyond what Brian has commented just based on the past interactions with FDA. We did meet with FDA before we initiated the PROGRESS study. We've already gotten quite a bit of feedback from the agency that informed the design, the endpoints, the powering of this trial, and the implications of that for running a phase 3 program. And as we've previously communicated, we're really looking at running right now two parallel trials in phase 3, relatively small sample sizes because we know what the magnitude of the benefit is. And we're going to get affirmation of that in this trial in terms of the size of the reduction in pain score. We're really looking at roughly two parallel studies of 600 patients each, two arms of about 300 patients each. So the total program of two parallel trials of about 1,200 patients. That's sort of what we're looking at now. These would be placebo-controlled and have a single active drug arm. That's the program we're looking at now. We're looking at ways to potentially further accelerate that. And also, based on the quality of the data, we already have fast-track designation, but other discussions with FDA to potentially streamline and facilitate regulatory review. Great. Super helpful. Thanks. Thanks, Rowana. Our next question comes from Joe Pantginis with H.C. Wainwright. Hey, everybody. Good morning. And thank you for providing this focus to the street. So just want to focus on a bit of the logistics here. So again, don't want to belabor this, but when you look at the FDA's response to the Synquista letter, discussions around labeling and marketing appear to be, or in the past, really revolve around late-stage discussions about that. So I guess any clarity with regard to the clinical data application? Joe, could you clarify what you mean by that? I want to answer your question, but I just want to make sure I'm answering the right question. Sure. Apologies. So I mean, when you talk labeling and marketing potential deficiencies in the letter, that implies later-stage discussions with the FDA. So do you have any sort of commentary with regard to the clinical side of the application post the AdCom? I think, Joe, really the letter and our engagement with the FDA has really resulted in no further discussion of the clinical data. I think they see very clearly what we proposed and the data that they had. And in fact, the letter that we've received reinforces that. There's nothing else that they need from us. And in fact, yeah, that's the end of the conversation. Understood. And then, okay, so when you focus on Inpefa, I think there are a lot of working parts here. So when you imply you're keeping some baseline people for all the factors that you listed, not promoting expect sales to remain flat, what is the sort of cost-benefit analysis of then keeping this with regard to the underlying expenses for manufacturing supply and the underlying people that you're keeping on versus, say, how impactful the longer-term prescriptions of Inpefa might impact from a safety standpoint your HCM potential application? Yeah. No, look, that's a great question. And I think our balance of the two is to keep focus and effort scientifically. In fact, and Craig can talk a lot about the ongoing studies that we have and engagement for Inpefa and then looking forward to HCM. The back-office activity that we need to support it is very low, actually. And the folks who will be doing the things like supply and patient access, etc., will be doing that not as an exclusive role. They will have other activities within the company. It just behooves us now, given the state of access that currently exists, and this was why we made the pivot in the first place, the cost of keeping on a commercial organization with a current access level is just not sustainable how we are. This is why for the short term, we make the pivot to our development candidates, which we believe in strongly. But at the same time, we continue to focus on Inpefa for the long term and have a relationship with the cardiology community that will continue unabated, really. I think that's the sort of source of your question around do we lose faith amongst the cardiology community as we march forward towards Inpefa and later of our path forward and with HCM, but we're strongly of the conviction that we have great relationships in the cardiac community, that we will continue scientifically, and that we will continue to build momentum as we march towards HCM readout. No, absolutely. And of course, the underlying cost to support that, which you implied, are very minimal. So I appreciate that. And then just one last, if you don't mind, how should we view the balance? I mean, you talk about seeking potential partners for the pipeline. And then how should we balance that with potential thinking around in-licensing of assets also versus internal candidate identification for the future? Yeah. Another great question. I think clearly our ability to in-license is going to be dependent on non-dilutive cash. And we do believe strongly, and I think we've talked about this before, Joe, around the potential of LX9211 to be a major, major asset, not just for Lexicon, but for the pharmaceutical community. And indeed, at the end of phase 2 and leading up now, there's a number of engagements that we have with majors. If we go down a path of a partnership or a licensing post-phase 2, that we believe would give us a great position, great capital position to potentially in-license to bring into our very strong development pipeline, our development capabilities. And at the same time, we are progressing two other preclinical assets that we find very interesting still in the cardiometabolic and neuroscience space. So we'll balance the two depending on where things read out, likely Q1 next year. Thank you very much. Thanks, Joe. As a reminder, if you'd like to ask a question at this time, please press star 11 on your touch-tone phone. Our next question comes from Joseph Stringer with Needham and Company. Hi, good morning. Thanks for taking our questions. What other indications are you thinking about for 9211 and 9851? And I guess when could we see an update on what those indications could be and maybe some potential development timelines? And then second question is, what's your expected cash runway following the restructure? Yeah, great. So firstly, with regard to LX9211 and the potential indications, in fact, we see broad applicability across various types of neuropathic pain. I'll ask Craig to comment specifically in a minute. But we also have fantastic preclinical data in spasticity, in MS-related spasticity in particular, but other forms of spasticity as well. So this is a potential broad applicability across both neuropathic pains and spasticity indications. And in fact, that's the development that we're doing now to look at those potential indications as part of an LCM. So Craig. Yeah. To have a broad pain indication, you really need to have three different neuropathic pain indications. As a reminder, we don't really talk about it that often, but we did another pilot study, what we call the 202 study, that was done in post-herpetic neuralgia. And the overall pain score reduction in that trial on a placebo-adjusted basis was actually even larger than that we achieved in the DPNP trial. As a reminder, that study was much smaller, only 75 total patients, 35 patients per arm, and was only done with the higher dose, the 200 mg dose. While the point estimate placebo-adjusted reduction in pain score was even larger than in the DPNP trial, it did not achieve significance, but there was a 35% dropout rate in that trial, again, due to dizziness, which we, I think, now have definitively attributed to the loading dose, particularly that 200 mm day one loading dose that was in that trial. So we believe that there's an opportunity to look at post-herpetic neuralgia. As Mike mentioned, there is some really compelling preclinical data on a spinal nerve ligation model, which is a neuropathic pain-associated model, which could be things like spinal cord injury and otherwise. But those are the kinds of indications that are much broader in scope that would be ideally done in a partnering setting, unlike where I think we could do a post-herpetic neuralgia study ourselves in addition to a DPNP trial if we chose to do so. There are other areas that we've looked at in neuropathic pain. We think some of these other more non-specific things, whether it's radiculopathy or chronic fatigue syndrome that others have talked about, are very difficult clinically to do. And there are other indications and other forms of neuropathic pain that we think are more clearly mechanistically based that might be higher probability of success indications that we're looking at and talking to experts about. Right. And to your final question there, Joey, just on cash runway, we'll clearly map this out very clearly as we march towards the end of the year. But as you can imagine, this takes us well to the end of 2026, but we'll give a more specific update in the Q4 budget. And we have at least a couple of years' cash runway with the current spend. Thank you. That concludes today's question and answer session. I'd like to turn the call back to Mike Exton for closing remarks. Thanks, everyone, for joining. As you can imagine, it's a very important and somewhat difficult day for us, but we're incredibly excited about the opportunity and future for Lexicon now with the ability to refocus on our important pipeline. Really appreciate your questions and looking forward to explaining that to you in more detail in the future. Thanks very much, and have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.