Okay, let's go ahead and get started. Welcome, everybody, to the third day of Evercore ISI's Healthcare Conference in Miami. For those who don't know me, I'm Michael DiFiore. I'm one of the senior biotech analysts at Evercore. Pleased to have with us the management team of Lexicon Pharmaceuticals. We have Scott Coiante, SVP and CFO of the firm, as well as Craig Granowitz, SVP and Chief Medical Officer. Gentlemen, welcome. Thank you for making the trek down to Miami to be with us today. A lot to discuss, but before we kind of delve into Q&A, we'd love to kind of get your overview of the business and what we could possibly look forward to in the next 10 to 12 months. Sure, Michael. Thanks so much to you and the bank for having us at the conference. And Lexicon's been around for close to 30 years at this point, but during this past year, our efforts, our goals and efforts have primarily focused in five areas. We had our end-of-review meeting for Zynquista in type 1 diabetes, and working with the agency, we believe we have a path forward for resubmission with some new data, new safety data that's being accumulated in an ongoing trial. Craig will speak more about that. Our phase III trial in HCM, our SONATA trial, is progressing well. All of our sites are open. We are currently enrolling with a projected enrollment completion of the first half of next year and data towards either the end of next year at the latest Q1 of 2027. Earlier this year, we licensed LX9851, our preclinical obesity asset to Novo Nordisk for an upfront payment and milestones totaling over $1 billion. We completed our responsibilities, our preclinical responsibilities, and handed everything off to Novo, and they're diligently working on the IND submission. About a year ago, we partnered our heart failure drug, INPEFA, with Viatris for territories ex-U.S. and ex-Europe, and they've made tremendous progress during the year. They've filed and received approval in the UAE, and they've also filed in five additional jurisdictions, including Canada and Australia, with more filings expected in the years to come. Then lastly, we had a phase II data readout from pilavapadin, our program in DPNP, and we are diligently End-of-phase II meeting, which is going to happen this year, which means this month. So a lot going on with those efforts, which will lead to potentially meaningful catalysts in the upcoming year. Got it. A lot to dig into. So maybe let's first start with Zynquista. You submitted additional data from the external type 1 diabetes studies, and the FDA has pushed its Type D feedback into the fourth quarter. So how are you thinking about that dialogue today, and what would you see as a realistic next step if the feedback is constructive? Yeah, Mike, thanks for the question. We received an end-of-review meeting, which we had the first quarter of this year, and the FDA has publicly posted our CRL along with a number of other companies' CRLs as part of their transparency campaign. There are three important elements that were raised in their end-of-review meeting. The first is that they recognize the importance of having additional glycemic control above and beyond insulin, because only 20% of patients are getting to go on insulin with type 1 diabetes, and this is a glycemic filing, not an outcome-based filing. The second is that they recognize the urgency from the patient community for this medication. And the third is that they're willing to take a non-traditional route of looking at data to address their single issue, which was the rate of diabetic ketoacidosis in a going-forward population, so not out of the existing studies. They did not question the efficacy. They accepted the efficacy of the drug to lower A1C, reduce blood pressure, reduce severe hypo events. So all of those they accept. They just wanted a fresh data set on DKA rates. The challenge with DKA rates is that these are rare events. We're only looking at about three to four events per 100 patient years. We did not think that it was really both ethical or practical to conduct a trial with that as a primary endpoint. Based on the relationships that we have in the type 1 field, we had supported a large trial being run by a group called Steno, which is a Danish group that has been in existence for more than 40 years and is a network of up to 40 centers throughout Denmark. This is a 2,000-patient study designed primarily to look at reduction of stroke and MI events, and sotagliflozin is included in that trial. We were able to work with the FDA to say, we're not interested in the endpoint of the trial, per se, of what the investigators want, but there's going to be a massive amount of exposure data on sotagliflozin. Kind of a mine that data almost. Exactly. So we are taking a slice of that data set, which is just pure exposure data on Sota to address the DKA question. Wow, that's a nice win-win there, because to run your own separate study, that would have taken a lot of resources. Yeah, I mean, so we did model that out. First of all, I had real concerns about how you would even design such a trial, because you really can't ask patients to not get educated on diabetic ketoacidosis. So what is even going to be your comparator? And then to run an open-label study just looking at DKA, you're never going to get patients to enroll in that, because what's the value to them in doing so? The fact that we're able to do this probably saved on the order of maybe $50 million in three or four years of time. Excellent. So now in terms of your kind of just accessing that Danish study, when can we expect you to kind of just bring that main data package to the FDA? So this has been a lot of the discussion we've had with the FDA, and again, I want to give credit to the agency of their willingness to be in dialogue with us around this process. So this is an actively enrolling trial that's accumulating data month by month. There are two main criteria that we really are following. The first is the actual enrollment of the study and exposure data, and the second are the DKA rates. And we have come to agreement with the FDA on exposure requirements within bands of DKA event rates that would be acceptable for submission. So we're working within that timeframe. I see. I see. Maybe now let's pivot to the HCM program. You've described SONATA as kind of the backbone of a broad HCM program with the sotagliflozin and sotagliflozin crossover providing kind of complementary data. How much of the potential HCM label do you see coming from SONATA itself, and what do you realistically expect those smaller studies to contribute from a regulatory perspective? From a regulatory perspective, SONATA hangs by itself. That is the key registration trial that's the agreement we have with the FDA, similar to other companies that have gotten or have filed for submission with a single trial in HCM. The primary endpoint is KCCQ. We've powered the study for an effect size similar to that, which has been seen with other CMIs for KCCQ benefit, which is really in the range of four to five points on a placebo-adjusted basis, seen as clinically meaningful, so that is really the registration trial. I think there are lots of questions, though, around HCM as a disease itself and looking at complementary therapies, because we believe that the foundation of treating HCM is going to be combination therapy. There's not going to be one size fits all. I think there'll be a role for a CMI, particularly in obstructive disease, in relieving the outflow tract obstruction. I think it remains to be seen the role of CMIs in non-obstructive disease, but clearly the necessity for combination therapy, and especially a drug like sotagliflozin that has effects both on the overall body to reduce cardiac work and improve outcomes. That's why the drug is approved in heart failure, but also specifically in sotagliflozin, specifically with the SGLT1 effects on the myocardium itself to improve energetics and reduce that diastolic dysfunction, which really is a unique attribute of sotagliflozin, either compared to the CMIs or compared to SGLT2 inhibitors. I see. I think you've already kind of partially answered my question. Kind of in terms of the KCCQ signal, you're saying you're kind of looking for a four- to five-point placebo-adjusted delta, correct? That's what the other companies have focused on, and I think you can sort of work through that from the powering. We haven't specifically disclosed a specific number or a statistical plan, but I think certainly that range has been seen as clinically meaningful. Got it. Got it. Okay. Anything that we didn't cover on Zynquista or Sota that we should have before we kind of move on? I think the issue with Zynquista really is, and again, this is type 1 diabetes for glycemic control. Even in the era of pumps and all of the glucose monitoring, only 20% of patients are getting in their time in range goal, which is to be time in range at least 70%-80% of the time. So it's not going to be solved by technology. I think that there is a lot of use of other agents off-label, and to be the first agent ever approved in addition to insulin for glycemic control, I think is going to be a very important watershed event for the type 1 diabetes community, which is a highly active community, and thank goodness these patients are living longer, but there has been a dearth of drugs for type 1 diabetes. Sure. I want to concentrate on type 2. It's kind of like, unfortunately, type 1s are kind of, I don't want to say ignored, but overshadowed, I would say, by type 2. It's a harder population to study. It is a smaller population. There are special needs of patients with type 1, and I think certainly the Holy Grail is to have a replacement of the beta cells, but I think that is still a major challenge in terms of trying to bring that forward. We think that the community has been very supportive of us that having a solution for that, if we can come to agreement with the FDA and refile and get approval, is going to have a meaningful impact on all of those patients with type 1 diabetes. When you think about just the DKA, the old history with sotagliflozin, what are KOLs saying when you go to these medical meetings? How do they view sotagliflozin in the type 1 setting and even HCM setting? I'll focus first on the type 1 just briefly. This is not an independent causal factor of diabetic ketoacidosis. It's for those patients that have a predisposition for having a DKA event, particularly infection, change in your diet, change in your fluid intake, alcohol use, or injury where your insulin requirements change dramatically. That is a group that is prime potentially for a DKA event. So we really believe that the baseline education around diabetic ketoacidosis is applicable to SOTA. When we did the clinical studies, there were no events of DKA that were found that were not associated with another antecedent event. So I think the interest level there, and again, I think there's going to be patient selection. This is not going to be for everyone. It's not going to be for, let's say, a relatively recently diagnosed person that is still trying to come to grips with managing their insulin. That's probably not the ideal candidate. But for those that are beginning to have signs and symptoms, particularly decline in renal function before they're in frank CKD, this is really going to be the ideal candidate, and you see that in the enrollment of Steno. The age limitation is 40 years old with some evidence or history of either CKD or cardiovascular disease, so we think that really is the right target population. For HCM, I think there is great interest in SOTA, particularly for the non-obstructive group. I think the obstructive group, even with the CMIs, which seem to be very effective at relieving outflow tract obstruction, 20% of those patients remain symptomatic. Even when you relieve the outflow tract obstruction, there's still the underlying genetic problem that leads to heart failure. It is really the diastolic dysfunction and the altered energetics that are the drivers of what causes heart failure. We think that Sota is really a well-positioned drug with its unique mechanism with both the SGLT1 and SGLT2, both acting outside the heart and inside the heart to reduce progression of disease. Also think that the elements that Sota that are unique around reducing MACE events, stroke and MI, which is not seen with SGLT2 inhibitors, is particularly relevant for patients with HCM, because something on the order of 15%-40% of patients on HCM develop AFib. AFib is a high risk factor for developing stroke and MI. So by having anti-stroke and anti-MI effects that have been demonstrated in large outcome studies, and we now have mechanistic data on that, even compared to an SGLT2 inhibitor, we think is another reason why Sota could be an ideal drug for use in HCM. Makes sense. Maybe in the remaining time, we can pivot to pilavapadin? Pilavapadin is now approaching End-of-phase II discussion. How are you thinking about the right development model for phase III? And what would you look for a partner to bring to that program? I think the important thing that I'd like to stress with pilavapadin and DPNP, this is probably the largest phase II program that's been done on any agent for DPNP. We have nearly 700 patients treated at dose. We've run three separate arms over two separate trials of the 10 mg dose, and in each case, there's been a large, meaningful, and at least nominally, statistically significant deviation from placebo. And I don't think there's any other drug that's in phase II that has achieved that level of repeated efficacy. As this is such a large market opportunity, it has overlap across multiple specialties, including primary care, and is really a global disease. We believe that having a large partner develop that with us and really doing all the market development work alongside during the phase III program is the ideal way to develop that asset. That's such a mass market indication. Yeah, and these are relatively small, relatively short trials. And again, I'm speaking of the cardiovascular space, right? You're really talking about two pivotal trials of only 700 or so patients each. You only need 350 patients in a two-arm trial of active versus placebo. And these trials are only 12 weeks in duration. So you're really looking at about a two to two and a half year program of two parallel trials totaling only about 1,400 patients. Got it. You talked about looking at the totality of the phase II data for pilavapadin. So as you kind of End-of-phase II meeting, what are the key phase III design choices you see as most important to carry that signal forward? Yeah, the first and most important is anchoring with FDA their comfort in the selected dose of 10 mg. I think we have a really strong rationale for that 10 mg dose, and we don't foresee there being any issues, but clearly that's an important criteria. The second, and we already have the feedback from FDA, and we've looked at other analogs of companies doing studies in neuropathic pain. Two positive parallel trials are going to be required for approval. So we want to anchor that. The sizing, the statistics, there's some complicated statistics on data carry forward that need to be done. These are elements that the FDA has been pretty consistent on, and we've incorporated into our trials, but we want to anchor the SAP. The other is what additional trials is the FDA going to want to see associated with the phase III program? During this period, we've also de-risked the program in several other ways. We've done a detailed QTc study and showed no QTc signal. We've done a renal impairment study and showed that we can safely dose this drug down to a GFR of 30. So we've already taken a number of actions. We've qualified all of the metabolites. We've done a lot of the DDI work, but we want to make sure that we really anchor all of that with FDA so we have a very clear straight shot to phase III and registration. Got it. This is pain. This is neurology. Placebo effects are sky high. Could you speak about any placebo mitigation strategies for phase III? Has that been disclosed yet in the past? We've talked in general terms about it. I think it is a really critical issue. The first is we've run all of our trials of the placebo control. So I think we have a pretty good understanding of what the criteria are. In talking to a number of the experts and our own experience, having as few arms in the trial as possible is extraordinarily helpful, because if you have a three or four-arm trial as opposed to a two-arm trial, the placebo effect tends to be much higher because most of the patients think they're on active drug. The importance of reiterating education to the patients at each visit, because there can't be a drift in how people view their pain. So anchoring at each visit with the right training and reinforcement we've also seen, and we've heard from outside experts, those are important criteria. We've baked all of that into the phase III. There are other options that we've looked at. Honestly, they are either incredibly intrusive into the patient's life or otherwise really not practical to do on global trials, whether it is direct observation of dosage with cameras and screw bottles, and there's a lot of technology, but the question is, is it really practical? And then how is that affecting the results by having that level of intrusiveness? I think the other important thing is that the 10 mg dose is well tolerated. The placebo completion rate and the 10 mg completion rate were identical in the second phase III trial called PROGRESS that we ran. A big part of the non-compliance and the placebo effect is also patients stopping taking their medication because of dizziness or other CNS effects or other side effects. We’ve tried to incorporate all of this into the design of our phase III trial. Excellent. Maybe in the remaining 30 seconds we have left, LX9851, I mean, Novo has kind of really lauded this program, kind of wanting in terms of their desire to kind of push this program forward at pace. Maybe can you walk us through the clinical package or data that kind of created that enthusiasm for the program? Yeah, I think there's a couple of important points. The first is the field of weight management has to move to oral therapy and well tolerated therapy. So this is an oral agent. The second is this drug works on top of both amylin analogs and semaglutide. The third is it's acting in an orthogonal mechanism to a GLP-1. It's acting on satiety, not craving to eat. So it's not acting on hunger or appetite. It's acting on satiety at the other end. So we think for all of those reasons, that's why Novo is so excited about this program. Excellent. Well, unfortunately, that's all we have time for. But gentlemen, this has been an excellent discussion. Thank you so much for spending time with us, and we wish you the best of luck. Thank you, Michael.