Good. Okay, it looks like we're live now, so we can get started. Welcome everyone, and thanks so much for joining us for the next session at the Cantor Fitzgerald Global Healthcare Conference. I'm Steve Seedhouse on the biotech team here at Cantor, and it really is a privilege for me to welcome our next participating company, Lexicon Pharmaceuticals. I'm joined by CEO Michael Exton and CMO Craig Granowitz, and looking forward to a broad-spanning conversation, really at a moment, I think, that Lexicon has sort of evolved the company and really focused in some exciting areas with key catalysts coming up. We'll cover all of it. Maybe at the outset, I would love both of your perspectives on this first high-level question. Just on that strategic alignment that you've made to Lexicon over the past year or so, what's been the overarching sort of objective and vision for Lexicon going forward? Yeah. What we've looked to do over the last year or two is really focus the company, and focus our efforts into direct cardiometabolic activity. With that, with our lead program in HCM, we have what we think is a North Star indication really that is going to be a significant contributor to that particular space. In addition to that, we also have a program in type 1 diabetes that's going to be important for us moving forward. Furthermore, also in diabetic peripheral neuropathic pain, which is another important contributor to the pipeline. Finally, in our partnership with Novo Nordisk for LX9851 in obesity, so really a focused cardiometabolic company. Yeah, Steve, I think one of the things we really try to do is highlight, particularly focused on sotagliflozin for the moment where we have two late-stage programs, is really focus on those areas that highlight the difference in the unique attributes of the dual inhibition of both SGLT1 and SGLT2. At a highest level, all the life cycle management, all the indications we are going after is really going after those unique indications, such as type 1 diabetes, glycemic control, and cardiomyopathies with a lead in HCM that highlight those distinct attributes that build upon both the long-term history of SGLT2, but really adding where that SGLT1 inhibition makes a difference. For both of those, really, Steve, what it is about is playing in areas where we feel we can win. Not only from the science, we believe we can show significant differentiation versus standard of care, but importantly, commercially, where we can be the first and only in indication. That provides us a freedom of operation, if you like, to really play in a very significant part within the therapeutic treatment algorithm of these indications, and gives us commercial freedom to provide value to patients and stakeholders. Yeah. Okay, so let us start on HCM then as we work through some of those focus areas and key catalysts that are upcoming. First, I guess just, and Craig, you alluded to areas where you can emphasize the benefits of the mechanism, the dual targeted mechanism in particular. What is the therapeutic hypothesis for SGLT1, or SGLT1/2s, in HCM that was attractive? Well, HCM is a really heterogeneous disease. It is a clinical diagnosis that has a number of etiologies. So we think sotagliflozin on having both SGLT1 and SGLT2, is ideal because you are getting all the benefits of the cardiorenal effects of the SGLT2 inhibition, which are really important in congestion and other attributes of heart failure generally, but the myocardial-specific effects of SGLT1 inhibition as well when it comes to calcium flows, sodium flows, ketone-to-glucose ratios, and a number of other factors related to energetics, which more generally are the underlying pathophysiology of HCM. Did you want more? Yeah, look, it's interesting, Steve, because before I came to Lexicon, I was involved in heart failure for Novartis for a long period of time. One of the things is as I operated here in the U.S. in that particular program that was very clear for both Entresto as it was for dapagliflozin and empagliflozin, the pure SGLT2 inhibitors, is that when a patient has systolic dysfunction, so an ejection fraction, certainly HFrEF less than 40, but even between an ejection fraction of 40 to 55 or so, that sort of mid-range ejection fraction, you get efficacy with these agents. But as soon as a patient goes into what we call a normal ejection fraction, so 55, 60, 65, the efficacy of these agents wanes pretty dramatically. So essentially when you have diastolic dysfunction, this big thick left ventricle, these agents are ineffective. That's not the case for sotagliflozin. Sotagliflozin is the only agent where you see consistency of benefit across the ejection fraction. Most recent data from SOTA-P-CARDIA, as well as some of the post hoc analyses that Craig and the team has done from the heart failure program really shows that sotagliflozin is having a direct impact on diastolic dysfunction, symptoms, and overall structure of the heart, so potentially disease modifying. That was really the first light bulb moment for me to say, "Okay, this is different. This SGLT1 component of sotagliflozin is truly having an impact in diastolic dysfunction," and of course, thereby the direct hypothesis of benefit in HCM. Yeah. Craig, you also mentioned just the sort of dual acting activity and the role of congestion maybe in HCM as well. From a clinical trialist standpoint, do you think sort of the direct activity on cardiomyocytes, and then maybe this sort of adjacent activity from the SGLT2 or just from the mechanism more broadly could sort of both help in tandem at reaching some of the key endpoints and at delivering a successful phase III result? Absolutely. Well said, Steve, because symptomatic disease with heart failure is associated with congestion, so the blood volume is too large, and because of that, you get pooling of a fluid in the spaces, particularly around the lungs, and it really has a major impact on exercise tolerance, which has a major impact on KCCQ score. We've been able to demonstrate repeatedly in our heart failure program that we have an impact on KCCQ, and that really is a combination that you're getting the benefits of the SGLT2 inhibition. You see those early. You see those within a couple of weeks, and then the longer-term benefits of the SGLT1 inhibition on the myocardium. Okay. You've recently completed enrollment in your phase III HCM study. I believe that was last quarter, and then we're looking forward, of course, to these data in the first quarter of next year. Maybe take us through that study, and would love for you, if you could, to articulate what's the best-case blue sky scenario that could manifest in that study, just based on some of the analysis you've done of the heart failure studies and what you know about sotagliflozin versus a winning outcome that would be successfully commercially but maybe doesn't hit that blue sky scenario. If you could sort of give us a spectrum of potential outcomes. Why don't you take the study design, and I'll pile on over the top of that. One of the things we've tried to do with the company is to have study designs that are pragmatic and very much aligned with clinical care. I think the SONATA-HCM trial is consistent with that vision, that the only criteria for entry into the trial is a diagnosis of HCM and being on a stable underlying therapy, whatever that therapy is, and an entry criteria that is consistent with symptomatic disease as defined by a KCCQ score less than 85. The fact that we are allowing patients with an ejection fraction down to 50 if they are not on a CMI or 55 on a stable dose of a CMI, the fact that we are allowing any underlying therapy, and the fact that the endpoint is consistent with what clinicians normally do and patients feel, which is KCCQ, I think allowed for us to do a trial that was open to more sites for inclusion without having to do all the exercise testing, reduce cost, reduce timeline, and was far more relevant to clinical care, particularly outside of major academic centers. That was the overall guiding philosophy of why we ran the study design we ran. In terms of what we can expect, I think the expectation has been sort of set from outside in what a successful trial looks like. We powered the study to get a KCCQ improvement of four points, four or five points, which was consistent with other studies in HCM. Most recently with ACACIA, we see a delta of 3 points, and that really, I think, sets the bar for us of what we need to achieve through SONATA-HCM. Particularly in non-obstructive HCM, where truly there is a huge unmet need. The number of patients, diagnosed patients, is growing steadily and as awareness and understanding of the disease continues to grow. With our safety and tolerability, well-established safety and tolerability profile matching that 3-point delta versus placebo, I think would be already a significant win for us. Of course, anything above and beyond that is upside both to the potential adoption towards the way payers sort of view all of these agents and the whole treatment paradigm completely. I think we feel very good about where we are standing right now and the potential to show significant benefit across both obstructive and non-obstructive disease. Yeah. I am hoping you could expand on that last point, just given the broad enrollment in SONATA and across oHCM and nHCM and what opportunities that will open up, but also does it present any challenges in terms of study execution or in terms of risk to the outcome of the study? On that last point, just maybe overlay the mechanism and what we know about its likeliness of working in those two indications and how that relates to the probabilities of the study outcome being positive across those two. Again, lead off and I'll pile on. Well, the nice, I think comforting aspect with sotagliflozin is we have this very large database and already the drug has been approved in heart failure generally. We have the broadest label of any heart failure indication on having both recent and worsening heart failure, as well as a chronic heart failure or a history of heart failure. So we're very comfortable with under our appreciation of the fact that the drug is effective across a range of heart failure states. I think we're really bringing that same philosophy to HCM, which is a heterogeneous disease, particularly the non-obstructive group, which is really a combination of probably genetically driven or sarcomeric driven underlying disease, as well as genetics and environmental, particularly obesity and diabetes. Since we've been able to demonstrate effectiveness, not only in terms of improving symptoms and function, but we also have long-term outcomes in related groups like HFpEF, where we've demonstrated a reduction in cardiovascular death, hospitalization for heart failure, stroke, and MI. So we're really coming at this with a significant confidence and large data set. So look, Craig and the team really sort of pioneered this running a single study across two different subsets of a disease in heart failure where they had HFrEF and HFpEF in a single trial, and this one is consistent with that. We feel very confident that the underlying basis of the symptomology, this diastolic dysfunction, is common across both obstructive and non-obstructive disease. sotagliflozin, because it works directly on the cardiomyocyte energetics, is going to be equally effective across both. Now, of course, how that plays out from my perspective commercially, where you have a number of agents that have been shown to be quite effective in obstructive disease and being used within academic medical centers, then how that then plays out of where sotagliflozin fits in that treatment paradigm, I think will obviously be determined by the data. But clearly, these agents can and will work in a complementary fashion and provide benefit to the patient. I think in non-obstructive disease, where again, as we've mentioned, the potential is wide open, and there are clearly not going to be as many potential therapeutic options and an option that is quite laborious and involved. I think having a once-a-day oral medicine with a well-known safety tolerability profile really lends itself to a first-line agent for symptom control in these patients. We have recently promoted Rachel Martens from our team, who has been leading BD&L, into the role of Chief Commercial Officer. She ran the insulin business for a long time at Sanofi and building out a very small but mighty commercial team, very experienced head of marketing and a head of market access. We are currently conducting a wealth of market research to really understand both where physicians and payers see sotagliflozin, given the target product profile that we've described and set the study up for. Over the next couple of months, we'll really be able to share with everyone what those findings are and give you sort of a bit more wholesome view of where the market opportunity for sotagliflozin is in HCM. That's great. If the phase III delivers the data that you hope and expect in first quarter, already getting ahead of the curve on the commercial preparedness side. Oh, yeah. Absolutely. Yeah. Absolutely. Terrific. Can you talk about the KCCQ primary endpoint first? Is it sort of equally relevant across obstructive and non-obstructive, and is it important in this study for you to also deliver differentiated results or at least significant results on things like LVOT and VO2 and just to have data to compare to some of the other endpoints, maybe from the CMI studies? Another very good question. Before we started the trial, we spent a lot of time with the medical and scientific community on KCCQ as the really gold standard endpoint for this disease. We also had that discussion with the FDA and gained alignment with the FDA that KCCQ score would be adequate as the single primary endpoint for the study consistently across both the obstructive and non-obstructive as one group. So that is the primary endpoint is KCCQ across the entire 500-plus enrolled patients in the trial. The study is not designed nor powered, nor did the FDA expect us to independently power this for obstructive and non-obstructive, which is exactly what we gained with the FDA when we ran our heart failure program that included both recent worsening heart failure, chronic heart failure, HFrEF, and HFpEF. We got one label on two trials in that regard. I think that really is the overall design characteristic. The fact is we have all of these other validated endpoints, as I mentioned previously, in our heart failure program. I think that gave the FDA a lot of comfort with both the safety and long-term efficacy of the clinical trial program. The key secondary endpoint is New York Heart Association, and then there are a number of other secondary endpoints and exploratory endpoints. The fact that the trial is still running now and both ACACIA and ODYSSEY are complete gives us a chance to think about as we think about the hierarchy of secondary endpoints, do we want to tweak some of those a bit in terms of the hierarchy, in terms of the number and the order in which we analyze those to get additional secondary powered claims into the label. I think overall, we feel confident that the primary endpoint is going to be unchanged, and the fact that we over-enrolled the trial and the fact that the bar has been set lower, I would say, in light of ACACIA and ODYSSEY give us even more confidence that we will hit the benchmark that is the market expectation. Yeah. I think for commercial success, Steve, it really is KCCQ. That is what patients are suffering from. That is what is really impeding their life, and what they want some relief from. So that is very important. I think the piece where we will continue to gather data, even once we see SONATA-HCM and continue via investigators studies and the like, is this knowledge that sotagliflozin not only improves or has the potential to improve symptomology, but in fact is disease modifying. You just look at the SOTA-P-CARDIA data, as you know, which was run in patients with HFpEF, but with a true normalized ejection fraction without diabetes. You see this quite remarkable left ventricular remodeling, so a reduction in left ventricular mass, which is going to be important not only for symptoms and patients feeling better, but obviously for all the long-term consequences that we have seen benefit from in the heart failure program. So really the benefit of having a well-established heart failure program and benefit in outcomes will be born to bear in HCM as well, even though it is not the core heart of SONATA-HCM. All of those effects will continue to gather and add evidence and credibility for why this will be such an important part of the treatment regimen. Lexicon with this mechanism and with sotagliflozin, you are sort of above the fray of what is happening in the CMI landscape, and there is quite a bit happening, right? There is some novelty. Yeah in that space, and the competitive landscape is expanding. How does that affect how you're looking at the sotagliflozin entering this market and- Yeah how do you navigate with all of that happening around the fringes of what you're doing? Yeah, look, that's really important, and it's core to what this leadership team has done with Lexicon. In fact, Lexicon has also been in that position in heart failure, where it's been one among a number of players in a particular market basket in, at the payer level, where sotagliflozin was lumped with JARDIANCE and FARXIGA. And that's incredibly competitive, not only at the physician interface, but from a managed care, from a contracting perspective. It places a lot of pressure on those folk who do have a common mechanism. And I think, within the CMI, that will continue to build as more players come into the space, and they will obviously compete on a number of their features and attributes as well as for market access. It's for that very reason that we have chosen to go into indications where we can be the first and only, because it affords us the freedom to operate commercially at the physician interface, but perhaps even more importantly, provides us an access position that is free from that competitive environment. The last thing I'll say here is, we see these mechanisms as being entirely complementary. If you boil it down to the fundamentals and trying to keep it simple, the CMI are truly a hemodynamic agent, so they're affecting how blood is pushed through. Whereas sotagliflozin is a metabolic agent, so how energy is produced, stored, and utilized. And really those two mechanisms, I think, will add complementary benefit. In fact, we will see that with SONATA-HCM, because we have a number of patients in the study who are currently on a CMI. It will be, in fact, the one and only study probably forever maybe that will show data looking at what is the relative impact, both from an efficacy and safety perspective of combining these two classes of agents. That is great insights. I want to also ask about type 1 diabetes, just because you are approaching, I guess, an NDA submission. Circling back on sort of maybe a long story journey to get to this point, would love for you to just sort of recap some of that history and update us on where we are today. I think you even had an update on your last earnings call just in terms of some supporting data or some insights into some data you have had, but now you have sort of turned the curtain over on. Maybe bring us up to speed on T1D and where things stand there. Yeah. In type 1 diabetes, when the original submission took place back in 2018, the FDA was convinced of the efficacy of this drug for glycemic control in type 1 diabetes. They took issue at that time with a safety signal, the rate of DKA. We, at the time, disagreed with their conclusion, and yet, over the ensuing sort of six or seven years, there has been back and forth to see how can we get the FDA comfortable that the DKA risk of sotagliflozin is acceptable. Through all of that, the FDA has really wanted the company to run a prospective study. Not to look back and do data cuts, et cetera, but run a new study, which is very difficult when you are looking at a safety signal of a very low incidence endpoint like DKA. Thankfully, Craig had supported a study in Denmark, a large study in type 1 diabetes looking at cardiovascular outcomes. We were able to provide the framework to be able to use this study with the FDA, and we've had very collaborative engagement with them to not take the primary endpoint, but to look at the rate and incidence of DKA in this study, because a number of them are taking sotagliflozin as a part of this study. The FDA for a long time didn't provide the company guidance on what good would look like, what would be acceptable for a resubmission, and what we have now is clarity on what that looks like. We need a certain amount of exposure of patients on sotagliflozin, which approaches what we had in the inTandem phase III program. So they needed that. They need a certain number of patients on sotagliflozin, and they needed a rate of DKA that was less than what was observed in the 400 milligram group in the inTandem3 program. Now, because the study is open label, so we see that data monthly on a real-time basis. We actually revealed yesterday that end of August, we have the exposure required that the FDA has informed that we need, and that the DKA rate is both lower than was observed in the inTandem program and similar to what we see in the standard of care of that investigator study. So really, we're fulfilling those critical requirements that the FDA has always wanted from this program. That gives us still a bit of work to do, but a degree of confidence that when we resubmit this in Q4, we have a higher degree of likelihood of having an approval and potentially becoming the first adjunct to insulin for control of glycemia in type 1 diabetes. Yeah. So maybe walk us through after NDA submission, what can we look out for then? Is this something where do you expect the FDA to convene an AdCom and talk about the prospect of the entire data set going back to that 2018 submission? Or do you have a handshake agreement that this is the last missing piece? What can we expect? Yeah. We don't expect an AdCom. Of course, you can never say never, because the FDA is free to determine what they think. But we have been given very specific instructions on the Steno data. This is the last missing piece. Actually, the Steno data is unequivocal and I think very clearly aligned with their expectations. That isn't what we think is going to proceed here. Okay. You've sort of in parallel been hyper-focusing on these sort of high-value opportunities, T1D, which is you were sort of on the precipice on just awaiting this data, and then obviously HCM, you made a pretty assertive bet on. But in the meantime, you've been collecting some milestone payments for some of these other programs that have been licensed, and you have some economics on an obesity program. Correct. I would love to hear about that. Maybe you can walk us through some of these other things in the pipeline, and just maybe how meaningful they could be, particularly Yeah the obesity program, neuropathic pain, and anything else you'd want to highlight to look out for. No, absolutely. Let me take the obesity program, then we'll talk about AAK1 as a mechanism and what we're doing there. In obesity, one of the things that we did as a leadership team over the last couple of years was focus our efforts where we have the capabilities and we know we can win. Although obesity is a obviously growing area of interest for many, many companies, and LX9851, our lead compound against an enzyme called ACSL5, showed incredible results. We just knew that the scale and scope of the program we would need to develop to get that to market and then be successful commercially was beyond our realm, given everything else we've got going on. We were pleased when Novo Nordisk came and were very interested in that particular mechanism, and were able to out-license that worldwide rights to Novo Nordisk last April. Now, we received $45 million upfront for a preclinical asset, a pretty significant upfront, and we completed the IND enabling studies last year. Novo submitted the IND in January of this year. We received $10 million milestone payment there, another $10 million for initiation of the single ascending dose, and another $10 million in August for initiation of the multi ascending dose. The overall deal is about $1 billion in biobucks. There's a significant opportunity. About half of that is development milestones and about half is commercial milestones. This is a significant development program where as it moves obviously into phase II and beyond, all things being well, that has significant economics for Lexicon. We're super pleased with that program. Maybe you want to talk about AAK1. Yeah. Just briefly with AAK1, it's an extraordinarily interesting and important mechanism that has applicability across a range of diseases. Neuropathic pain was just a lead indication, but we've demonstrated in preclinical models that we've presented a number of other pain states that are associated with overactive neuronal firing. But the mechanism also has significant benefit in other diseases, and we are in the process of considering filing INDs in those other diseases. But I think there is a lot of value, almost a pipeline and a pill for the AAK1 mechanism. The fact that we got the milestones and we were able to do a capital raise earlier this year took the pressure of us having the necessity to do a deal to raise non-dilutive capital to fund our rest of our portfolio, so we can actually take the time and more fully realize the value for Lexicon before potentially partnering this. Yeah, we will likely reveal some of this data later this year. It's very compelling. Some indications we think this is very clear and perhaps some out-of-the-box indications as well. AAK1 is, again, similar to many of Lexicon's program, a novel target that really is understudied but has high value across many disease states. Very good. Well, appreciate that overview of those products and obviously looking forward to seeing the data card flip over in HCM here sooner than later. That'll fast approach as we get into the first quarter of next year. So, thanks for the conversation. Really exciting stuff going on at Lexicon, and we're looking forward to following it more closely going forward. Thanks for the invite. Michael and Craig, appreciate it. Appreciate it. Thank you. Thank you. Thank you very much.