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(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Fiscal Year Ended December 31, 2016
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Delaware
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76-0474169
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
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8800 Technology Forest Place
The Woodlands, Texas 77381
(Address of Principal Executive Offices and Zip Code)
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(281) 863-3000
(Registrant’s Telephone Number,
Including Area Code)
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Title of Each Class
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Name of Each Exchange on which Registered
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Common Stock, par value $0.001 per share
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Nasdaq Global Select Market
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Item
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PART I
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1.
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1A.
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1B.
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2.
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3.
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4.
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PART II
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5.
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6.
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7.
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7A.
|
||
8.
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9.
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9A.
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||
9B.
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PART III
|
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10.
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||
11.
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12.
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13.
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14.
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PART IV
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15.
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16.
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•
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We have obtained approval from the U.S. Food and Drug Administration, or FDA, to sell our first commercial product, XERMELO™ (telotristat ethyl), an orally-delivered small molecule drug for the treatment of carcinoid syndrome diarrhea in combination with somatostatin analog, or SSA, therapy in adults inadequately controlled by SSA therapy. We have commenced sales and marketing of XERMELO, and it is now commercially available to patients in the United States. We have granted Ipsen Pharma SAS an exclusive, royalty-bearing right to commercialize telotristat ethyl outside of the United States and Japan, and Ipsen has filed an application for regulatory approval to market telotristat ethyl in the European Union.
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•
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We are developing sotagliflozin, an orally-delivered small molecule drug candidate, as a treatment for type 1 and type 2 diabetes. We have reported positive top-line primary efficacy endpoint data from two pivotal Phase 3 clinical trials of sotagliflozin in type 1 diabetes patients and are presently continuing such pivotal Phase 3 clinical trials and conducting a third Phase 3 clinical trial of sotagliflozin in type 1 diabetes patients. We have granted Sanofi an exclusive, worldwide, royalty-bearing right to develop, manufacture and commercialize sotagliflozin, and Sanofi is presently conducting Phase 3 development of sotagliflozin in type 2 diabetes.
|
•
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We are developing LX2761, an orally-delivered small molecule drug candidate, as a treatment for diabetes. We are presently conducting Phase 1 development of LX2761. We have granted Sanofi certain rights of first negotiation with respect to the future development and commercialization of LX2761.
|
•
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We are developing LX9211, an orally-delivered small molecule drug candidate, as a treatment for neuropathic pain. We have completed preclinical studies required for the submission of an Investigational New Drug application, or IND, for LX9211 and are presently preparing to submit an IND and commence clinical development.
|
•
|
Two clinical pharmacology studies assessing the pharmacokinetics of XERMELO, one to assess the pharmacokinetics of administering XERMELO in patients with moderate and severe hepatic impairment, and the other to address the effect of administering concomitant gastric acid reducers on the pharmacokinetics of XERMELO;
|
•
|
A non-clinical study to further assess the carcinogenicity of XERMELO; and
|
•
|
Three non-clinical studies to further evaluate the drug interaction potential of XERMELO.
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Name
|
Age
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Position with the Company
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Lonnel Coats
|
52
|
President and Chief Executive Officer and Director
|
Pablo Lapuerta, M.D.
|
53
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Executive Vice President and Chief Medical Officer
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Alan J. Main, Ph.D.
|
63
|
Executive Vice President, CMC and Supply Operations
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Alexander A. Santini
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58
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Executive Vice President and Chief Commercial Officer
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Praveen Tyle, Ph.D.
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56
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Executive Vice President, Research and Development
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Jeffrey L. Wade
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52
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Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer
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James F. Tessmer
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57
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Vice President, Finance and Accounting
|
•
|
issued patents and pending patent applications in Europe, the United States, and other countries throughout the world, including Australia, Argentina, Brazil, Canada, China, Europe, India, Israel, Japan, Mexico, New Zealand, South
|
•
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issued patents and pending patent applications in Europe, the United States, and other countries throughout the world, including Australia, Argentina, Brazil, Canada, China, Europe, India, Israel, Japan, Mexico, New Zealand, South Africa, and South Korea, that claim sotagliflozin and associated crystalline forms, pharmaceutical compositions comprising sotagliflozin, and methods of its manufacture and use;
|
•
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pending patent applications in Europe, the United States, and other countries throughout the world, including Australia, Argentina, Brazil, Canada, China, Europe, India, Israel, Japan, Mexico, New Zealand, South Africa, and South Korea, that disclose and/or claim LX2761, pharmaceutical compositions comprising LX2761, and methods of its use; and
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•
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pending patent applications in Europe, the United States, and other countries throughout the world, including Australia, Argentina, Brazil, Canada, China, Europe, India, Israel, Japan, Mexico, New Zealand, South Africa, and South Korea, that disclose and/or claim LX9211, pharmaceutical compositions comprising LX9211, and methods of its use.
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•
|
the efficacy, safety and reliability of our products;
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•
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our ability, and the ability of our collaborators, to complete preclinical and clinical development and obtain regulatory approvals for our drug candidates;
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•
|
the timing and scope of regulatory approvals of our products;
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•
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our ability, and the ability of our collaborators, to obtain product acceptance by physicians and other health care providers and secure coverage and adequate reimbursement for product use in approved indications;
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•
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our ability, and the ability of our collaborators, to manufacture and sell commercial quantities of our products;
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•
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the skills of our employees and our ability to recruit and retain skilled employees;
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•
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protection of our intellectual property; and
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•
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the availability of substantial capital resources to fund development and commercialization activities.
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•
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preclinical laboratory and animal tests performed under the FDA’s current Good Laboratory Practices regulations;
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•
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submission to the FDA of an IND, which must become effective before human clinical trials may commence;
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•
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adequate and well-controlled human clinical trials to establish the safety and efficacy of the drug candidate for its intended use;
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•
|
pre-approval inspection of manufacturing facilities and selected clinical investigators for their compliance with FDA’s current Good Manufacturing Practices and Good Clinical Practices regulations;
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•
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submission and FDA approval of a New Drug Application, or NDA, for commercial marketing and sale, or of an NDA supplement, for approval of a new indication if the product is already approved for another indication.
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•
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Phase 1 clinical trials are conducted in a limited number of healthy human volunteers or, in some cases, patients, to evaluate the safety, dosage tolerance, absorption, metabolism, distribution and excretion of the drug candidate;
|
•
|
Phase 2 clinical trials are conducted in groups of patients afflicted with a specified disease or condition to obtain preliminary data regarding efficacy as well as to further evaluate safety and optimize dosing of the drug candidate. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials; and
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•
|
Phase 3 clinical trials are conducted in larger patient populations at multiple clinical trial sites to obtain statistically significant evidence of the efficacy of the drug candidate for its intended use and to further test for safety in an expanded patient population.
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•
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the market acceptance and commercial success of XERMELO in the United States and the revenues we generate from that approved product;
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•
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the success of our sales, marketing, distribution and other commercialization activities for XERMELO in the United States;
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•
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if approved, the progress and scope of Ipsen’s commercialization activities with respect to telotristat ethyl outside of the United States and Japan;
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•
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the final results of our two pivotal Phase 3 clinical trials of sotagliflozin in type 1 diabetes patients, including continued progress of such trials on the timelines anticipated;
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•
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the results of our third Phase 3 clinical trial of sotagliflozin in type 1 diabetes patients, including continued progress of such trial on the timelines anticipated;
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•
|
the progress and scope of Sanofi’s development activities with respect to sotagliflozin in type 2 diabetes patients;
|
•
|
the timing, progress and results of our clinical trials of LX2761 and LX9211;
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•
|
the amount and timing of payments, if any, under our existing collaboration agreements with Sanofi, Ipsen and other entities and any future collaboration agreements;
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•
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the amount and timing of our research, development and commercialization expenditures;
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•
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future results from clinical trials of our other drug candidates;
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•
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the cost and timing of regulatory approvals and commercialization of additional drug candidates that we successfully develop;
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•
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the market acceptance and commercial success of additional products that we successfully develop and commercially launch;
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•
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the effect of competing programs and products, and of technological and market developments;
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•
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the filing, maintenance, prosecution, defense and enforcement of patent claims and other intellectual property rights; and
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•
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the cost and timing of establishing or contracting for commercialization capabilities of any other approved drug candidate.
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•
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our ability to successfully commercialize XERMELO in the United States and the amount of revenues generated from such commercialization efforts;
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•
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the amount and timing of payments, if any, under our existing collaboration agreements with Sanofi, Ipsen and other entities;
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•
|
the success of our ongoing preclinical and clinical development efforts;
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•
|
the timing and amount of expenses incurred with respect to our preclinical and clinical development and commercialization efforts;
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•
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our success in establishing new collaborations and technology licenses, and the timing of such arrangements;
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•
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the success rate of our development efforts leading to opportunities for new collaborations and licenses, as well as milestone payments and royalties;
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•
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the timing and willingness of our collaborators to commercialize pharmaceutical products that would result in milestone payments and royalties;
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•
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disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products and technologies;
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•
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general and industry-specific economic conditions, which may affect our and our collaborators’ research and development expenditures.
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•
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requiring us to dedicate a substantial portion of cash flow from operations to the payment of interest on, and principal of, our debt, which will reduce the amounts available to fund working capital, capital expenditures, product commercialization and development efforts and other general corporate purposes;
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•
|
increasing our vulnerability to adverse changes in general economic, industry and market conditions;
|
•
|
obligating us to restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing;
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•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and
|
•
|
placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
|
•
|
the number of patients with carcinoid syndrome diarrhea who are inadequately controlled by SSA therapy, as well as the number of newly diagnosed carcinoid syndrome diarrhea patients;
|
•
|
competition from SSA therapies and any additional products for the treatment of carcinoid syndrome diarrhea that may be approved by the FDA in the future;
|
•
|
the safety profile of XERMELO, including whether previously unknown side effects or increased incidence or severity of known side effects as compared to those seen during development are identified with the increased use of XERMELO after approval;
|
•
|
the effectiveness of our commercial strategy for marketing XERMELO and our execution of that strategy, including our pricing strategy and the effectiveness of our efforts to obtain adequate third-party reimbursement;
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•
|
the acceptance of XERMELO by patients, the medical community and third-party payers; and
|
•
|
our ability to meet the demand for commercial supplies of XERMELO and to maintain and successfully monitor commercial manufacturing arrangements for XERMELO with third-party manufacturers to ensure they meet our standards and those of the FDA, which extensively regulates and monitors pharmaceutical manufacturing facilities.
|
•
|
the effectiveness, or perceived effectiveness, of our products in comparison to competing products;
|
•
|
the existence of any significant side effects, as well as their severity in comparison to any competing products;
|
•
|
potential advantages or disadvantages in relation to alternative treatments;
|
•
|
indications for which our products may be approved;
|
•
|
the ability to offer our products for sale at competitive prices;
|
•
|
relative convenience and ease of administration;
|
•
|
the strength of marketing and distribution support; and
|
•
|
sufficient third-party coverage or reimbursement.
|
•
|
inability to recruit, retain and effectively manage adequate numbers of effective sales and marketing personnel;
|
•
|
inability to maintain relationships with third-party logistics providers, specialty pharmacies, third-party manufacturers and other third parties instrumental in the commercial manufacture and distribution of XERMELO and any other products;
|
•
|
inability to establish or implement internal controls and procedures required in connection with sales of pharmaceutical products;
|
•
|
inability of sales personnel to obtain access to or convince adequate numbers of physicians to prescribe XERMELO or any other products; and
|
•
|
lack of complementary products to be offered by our sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines.
|
•
|
the federal Anti-Kickback Law, which constrains our business activities, which includes our marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities, by prohibiting, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;
|
•
|
federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent;
|
•
|
federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
|
•
|
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;
|
•
|
the Foreign Corrupt Practices Act, a United States law which regulates certain financial relationships with foreign government officials (which could include, for example, certain medical professionals);
|
•
|
federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
|
•
|
state and federal government price reporting laws that require us to calculate and report complex pricing metrics to government programs, where such reported price may be used in the calculation of reimbursement and/or discounts on our marketed drugs (participation in these programs and compliance with the applicable requirements may subject us to potentially significant discounts on our products, increased infrastructure costs, and potentially limit our ability to offer certain marketplace discounts); and
|
•
|
state and federal marketing expenditure tracking and reporting laws, which generally require certain types of expenditures in the United States to be tracked and reported. Compliance with such requirements may require investment in infrastructure to ensure that tracking is performed properly, and some of these laws result in the public disclosure of various types of payments and relationships, which could potentially have a negative effect on our business and/or increase enforcement scrutiny of our activities.
|
•
|
an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned among these entities according to their market share in certain governmental health programs, not including orphan drug sales;
|
•
|
expansion of eligibility criteria and increases in the rebates manufacturers must pay under certain Medicaid programs;
|
•
|
a new Medicare Part D coverage program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during any coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
|
•
|
extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
|
•
|
expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; and
|
•
|
certain reporting requirements relating to financial arrangements with, and other “transfers of value” to, physicians.
|
•
|
not provide us accurate or timely information regarding their inventories, the number of patients who are using XERMELO or complaints about XERMELO;
|
•
|
reduce or discontinue their efforts to sell or support or otherwise not effectively sell or support XERMELO;
|
•
|
not devote the resources necessary to sell XERMELO in the volumes and within the time frames that we expect;
|
•
|
be unable to satisfy their financial obligations to us; or
|
•
|
cease operations.
|
•
|
the commercial success of XERMELO and the revenues we generate from sales of XERMELO;
|
•
|
adverse results or delays in clinical trials;
|
•
|
the timing and achievement of milestones under our collaboration agreements;
|
•
|
announcement of FDA approval or non-approval, or delays in the FDA review process, of our or our collaborators’ product candidates or those of our competitors or actions taken by regulatory agencies with respect to our, our collaborators’ or our competitors’ clinical trials;
|
•
|
actions taken by regulatory agencies with respect to XERMELO, sotagliflozin and our other product candidates;
|
•
|
the announcement of new products by us or our competitors;
|
•
|
quarterly variations in our or our competitors’ results of operations;
|
•
|
conflicts or litigation with our collaborators;
|
•
|
litigation, including intellectual property infringement and product liability lawsuits, involving us;
|
•
|
failure to achieve operating results projected by securities analysts;
|
•
|
changes in earnings estimates or recommendations by securities analysts;
|
•
|
financing transactions;
|
•
|
developments in the biotechnology or pharmaceutical industry;
|
•
|
sales of large blocks of our common stock or sales of our common stock by our executive officers, directors and significant stockholders;
|
•
|
departures of key personnel or board members;
|
•
|
developments concerning current or future collaborations;
|
•
|
FDA or international regulatory actions;
|
•
|
third-party coverage and reimbursement policies;
|
•
|
acquisitions of other companies or technologies;
|
•
|
disposition of any of our drug programs or other technologies; and
|
•
|
other factors, including general market, economic and political conditions and other factors unrelated to our operating performance or the operatin
g
performance of our competitors.
|
|
High
|
|
Low
|
||||
2015
|
|
|
|
||||
First Quarter
|
$
|
8.54
|
|
|
$
|
6.09
|
|
Second Quarter
|
$
|
8.49
|
|
|
$
|
6.30
|
|
Third Quarter
|
$
|
15.79
|
|
|
$
|
7.85
|
|
Fourth Quarter
|
$
|
14.50
|
|
|
$
|
9.22
|
|
2016
|
|
|
|
|
|
||
First Quarter
|
$
|
13.45
|
|
|
$
|
7.65
|
|
Second Quarter
|
$
|
15.17
|
|
|
$
|
11.52
|
|
Third Quarter
|
$
|
19.62
|
|
|
$
|
13.73
|
|
Fourth Quarter
|
$
|
19.50
|
|
|
$
|
13.71
|
|
|
December 31,
|
||||||||||
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
Lexicon Pharmaceuticals, Inc.
|
100
|
|
171
|
|
139
|
|
71
|
|
147
|
|
153
|
Nasdaq Composite Index
|
100
|
|
116
|
|
160
|
|
182
|
|
192
|
|
207
|
Nasdaq Biotechnology Index
|
100
|
|
132
|
|
218
|
|
293
|
|
326
|
|
256
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Statements of Comprehensive Loss Data:
|
|
|
(in thousands, except per share data)
|
|
|
||||||||||||||
Revenues
|
$
|
83,337
|
|
|
$
|
130,014
|
|
|
$
|
22,854
|
|
|
$
|
2,222
|
|
|
$
|
1,089
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development, including stock-based compensation of $3,938 in 2016, $3,693 in 2015, $4,020 in 2014, $4,376 in 2013 and $3,673 in 2012
|
178,151
|
|
|
95,187
|
|
|
89,279
|
|
|
89,682
|
|
|
82,574
|
|
|||||
Increase (decrease) in fair value of Symphony Icon, Inc. purchase liability
|
(703
|
)
|
|
5,927
|
|
|
1,428
|
|
|
(2,210
|
)
|
|
9,887
|
|
|||||
General and administrative, including stock-based compensation of $3,514 in 2016, $3,150 in 2015, $3,061 in 2014, $3,045 in 2013 and $2,822 in 2012
|
43,044
|
|
|
23,835
|
|
|
19,411
|
|
|
17,121
|
|
|
17,043
|
|
|||||
Impairment loss on buildings
|
—
|
|
|
3,597
|
|
|
13,102
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
220,492
|
|
|
128,546
|
|
|
123,220
|
|
|
104,593
|
|
|
109,504
|
|
|||||
Income (loss) from operations
|
(137,155
|
)
|
|
1,468
|
|
|
(100,366
|
)
|
|
(102,371
|
)
|
|
(108,415
|
)
|
|||||
Interest and other income (expense), net
|
(4,274
|
)
|
|
(6,150
|
)
|
|
2
|
|
|
(1,755
|
)
|
|
(1,796
|
)
|
|||||
Consolidated net loss before taxes
|
(141,429
|
)
|
|
(4,682
|
)
|
|
(100,364
|
)
|
|
(104,126
|
)
|
|
(110,211
|
)
|
|||||
Income tax benefit
|
—
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|||||
Consolidated net loss
|
$
|
(141,429
|
)
|
|
$
|
(4,682
|
)
|
|
$
|
(100,294
|
)
|
|
$
|
(104,126
|
)
|
|
$
|
(110,211
|
)
|
Consolidated net loss per common share, basic and diluted
|
$
|
(1.36
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(1.42
|
)
|
|
$
|
(1.58
|
)
|
Shares used in computing consolidated net loss per common share, basic and diluted
|
103,863
|
|
|
103,591
|
|
|
76,347
|
|
|
73,302
|
|
|
69,958
|
|
|
As of December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Balance Sheet Data:
|
|
|
(in thousands)
|
|
|
||||||||||||||
Cash, cash equivalents and short-term investments, including restricted cash and investments
|
$
|
346,504
|
|
|
$
|
521,352
|
|
|
$
|
339,339
|
|
|
$
|
129,128
|
|
|
$
|
223,208
|
|
Working capital
|
193,231
|
|
|
409,443
|
|
|
324,018
|
|
|
115,260
|
|
|
212,650
|
|
|||||
Total assets
|
475,625
|
|
|
651,960
|
|
|
471,376
|
|
|
274,160
|
|
|
371,778
|
|
|||||
Long-term debt, net of current portion
|
85,167
|
|
|
100,960
|
|
|
87,500
|
|
|
20,167
|
|
|
21,877
|
|
|||||
Accumulated deficit
|
(1,250,363
|
)
|
|
(1,108,934
|
)
|
|
(1,104,252
|
)
|
|
(1,003,958
|
)
|
|
(899,832
|
)
|
|||||
Lexicon Pharmaceuticals, Inc. stockholders’ equity
|
157,401
|
|
|
285,850
|
|
|
284,018
|
|
|
170,163
|
|
|
266,678
|
|
•
|
We have obtained approval from the FDA to sell our first commercial product, XERMELO (telotristat ethyl), an orally-delivered small molecule drug for the treatment of carcinoid syndrome diarrhea in combination with SSA therapy in adults inadequately controlled by SSA therapy. We have commenced sales and marketing of XERMELO, and it is now commercially available to patients in the United States. We have granted Ipsen an exclusive, royalty-bearing right to commercialize telotristat ethyl outside of the United States and Japan, and Ipsen has filed an application for regulatory approval to market telotristat ethyl in the European Union.
|
•
|
We are developing sotagliflozin, an orally-delivered small molecule drug candidate, as a treatment for type 1 and type 2 diabetes. We have reported positive top-line primary efficacy endpoint data from two pivotal Phase 3 clinical trials of sotagliflozin in type 1 diabetes patients and are presently continuing such pivotal Phase 3 clinical trials and conducting a third Phase 3 clinical trial of sotagliflozin in type 1 diabetes patients. We have granted Sanofi an exclusive, worldwide, royalty-bearing right to develop, manufacture and commercialize sotagliflozin, and Sanofi is presently conducting Phase 3 development of sotagliflozin in type 2 diabetes.
|
•
|
We are developing LX2761, an orally-delivered small molecule drug candidate, as a treatment for diabetes. We are presently conducting Phase 1 development of LX2761. We have granted Sanofi certain rights of first negotiation with respect to the future development and commercialization of LX2761.
|
•
|
We are developing LX9211, an orally-delivered small molecule drug candidate, as a treatment for neuropathic pain. We have completed IND-enabling studies of LX9211 and are presently preparing to submit an IND and commence clinical development.
|
•
|
The delivered item or items have value to the customer on a stand-alone basis.
|
•
|
If there is a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and within the Company’s control.
|
•
|
The consideration payable to the Company is commensurate with the Company’s performance necessary to achieve the milestone or the increase in value to the collaboration resulting from the Company’s performance;
|
•
|
Relates solely to the Company’s past performance; and
|
•
|
Is reasonable relative to all of the other deliverables and payments within the arrangement.
|
•
|
XERMELO, an orally-delivered small molecule drug approved by the FDA for the treatment of carcinoid syndrome diarrhea in combination with SSA therapy in adults inadequately controlled by SSA therapy;
|
•
|
Sotagliflozin, an orally-delivered small molecule drug candidate that we are developing as a treatment for type 1 and type 2 diabetes;
|
•
|
LX2761, an orally-delivered small molecule drug candidate, that we are developing as a treatment for diabetes; and
|
•
|
LX9211, an orally-delivered small molecule drug candidate that we are developing as a treatment for neuropathic pain.
|
Phase
|
|
Estimated Completion Period
|
Preclinical development
|
|
1-2 years
|
Phase 1 clinical trials
|
|
1-2 years
|
Phase 2 clinical trials
|
|
1-2 years
|
Phase 3 clinical trials
|
|
2-4 years
|
|
Expected Volatility
|
|
Risk-free Interest Rate
|
|
Expected Term
|
|
Dividend
Rate
|
|||
December 31, 2016:
|
|
|
|
|
|
|
|
|||
Employees
|
63
|
%
|
|
1.1
|
%
|
|
4
|
|
0
|
%
|
Officers and non-employee directors
|
83
|
%
|
|
1.6
|
%
|
|
8
|
|
0
|
%
|
December 31, 2015:
|
|
|
|
|
|
|
|
|||
Employees
|
64
|
%
|
|
1.2
|
%
|
|
4
|
|
0
|
%
|
Officers and non-employee directors
|
81
|
%
|
|
1.8
|
%
|
|
8
|
|
0
|
%
|
December 31, 2014:
|
|
|
|
|
|
|
|
|||
Employees
|
66
|
%
|
|
1.2
|
%
|
|
4
|
|
0
|
%
|
Officers and non-employee directors
|
80
|
%
|
|
2.3
|
%
|
|
8
|
|
0
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Total revenues
|
$
|
83.3
|
|
|
$
|
130.0
|
|
|
$
|
22.9
|
|
Dollar increase (decrease)
|
$
|
(46.7
|
)
|
|
$
|
107.2
|
|
|
|
||
Percentage increase (decrease)
|
(36
|
)%
|
|
469
|
%
|
|
|
•
|
Collaborative agreements
– Revenue from collaborative agreements decreased
36%
to
$83.2 million
, primarily due to a decrease in revenues recognized from the collaboration and license agreement with Sanofi. Revenues under the Sanofi agreement in 2016 were primarily attributable to the development activities performed by Lexicon relating to type 1 diabetes, together with funding of its share of type 2 diabetes development expenses. Revenues under the Sanofi agreement in 2015 were primarily attributable to the license portion of the upfront payment made by Sanofi in connection with the agreement.
|
•
|
Subscription and license fees
– Revenues from subscriptions and license fees decreased
46%
to
$0.2 million
.
|
•
|
Collaborative agreements
– Revenue from collaborative agreements increased
474%
to
$129.7 million
, primarily due to the
$126.8 million
of revenues recognized from the collaboration and license agreement with Sanofi attributable to the license portion of the
$300 million
upfront payment made by Sanofi in connection with the agreement.
|
•
|
Subscription and license fees
– Revenue from subscriptions and license fees increased
10%
to
$0.3 million
.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Total research and development expense
|
$
|
178.2
|
|
|
$
|
95.2
|
|
|
$
|
89.3
|
|
Dollar increase
|
$
|
83.0
|
|
|
$
|
5.9
|
|
|
|
|
|
Percentage increase
|
87
|
%
|
|
7
|
%
|
|
|
|
•
|
Third-party and other services –
Third-party and other services increased 110% in 2016 to $146.5 million, primarily due to increases in our external clinical development costs relating to sotagliflozin. Third-party and other services relate principally to our clinical trial and related development activities, such as nonclinical and clinical studies and contract manufacturing.
|
•
|
Personnel –
Personnel costs increased 27% in 2016 to $18.8 million, primarily due to increases in personnel, including increases in medical affairs personnel, in preparation for commercialization of XERMELO. Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs.
|
•
|
Stock-based compensation –
Stock-based compensation expense increased 7% in 2016 to $3.9 million.
|
•
|
Facilities and equipment –
Facilities and equipment costs increased 7% in 2016 to $3.3 million.
|
•
|
Other –
Other costs increased 52% to $5.6 million, primarily due to increases in travel and sponsorships.
|
•
|
Third-party and other services –
Third-party and other services increased 37% in 2015 to $69.9 million, primarily due to increases in our external clinical and nonclinical research and development costs relating to sotagliflozin.
|
•
|
Personnel –
Personnel costs decreased 35% in 2015 to $14.8 million, primarily due to reductions in our personnel in 2014. Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs.
|
•
|
Stock-based compensation –
Stock-based compensation expense decreased 8% in 2015 to $3.7 million.
|
•
|
Facilities and equipment –
Facilities and equipment costs decreased 54% in 2015 to $3.1 million, primarily due to reductions in depreciation and rent expense.
|
•
|
Other –
Other costs decreased 23% to $3.7 million.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Total general and administrative expense
|
$
|
43.0
|
|
|
$
|
23.8
|
|
|
$
|
19.4
|
|
Dollar increase
|
$
|
19.2
|
|
|
$
|
4.4
|
|
|
|
|
|
Percentage increase
|
81
|
%
|
|
23
|
%
|
|
|
|
•
|
Professional and consulting fees
– Professional and consulting fees increased 149% in 2016 to $18.5 million, primarily due to increased consulting costs in preparation for commercialization of XERMELO.
|
•
|
Personnel
– Personnel costs increased 58% in 2016 to $16.2 million, primarily due to increases in personnel, including increases in sales and marketing personnel, in preparation for commercialization of XERMELO. Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs.
|
•
|
Stock-based compensation
– Stock-based compensation expense increased 12% in 2016 to $3.5 million.
|
•
|
Facilities and equipment
– Facilities and equipment costs increased 59% in 2016 to $1.5 million, primarily due to increases in depreciation expense and property taxes.
|
•
|
Other –
Other costs increased 65% in 2016 to $3.3 million, primarily due to travel and training expenses.
|
•
|
Personnel
– Personnel costs increased 8% in 2015 to $10.3 million.
|
•
|
Professional and consulting fees
– Professional and consulting fees increased 91% in 2015 to $7.4 million, primarily due to increased consulting costs in preparation for commercialization of XERMELO.
|
•
|
Stock-based compensation
– Stock-based compensation expense was $3.1 million in 2015, consistent with the prior year.
|
•
|
Facilities and equipment
– Facilities and equipment costs decreased 37% in 2015 to $1.0 million.
|
•
|
Other –
Other costs increased 46% in 2015 to $2.0 million.
|
|
Payments due by period (in millions)
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less than 1 year
|
|
2-3 years
|
|
4-5 years
|
|
More than 5 years
|
||||||||||
Debt
|
$
|
103.8
|
|
|
$
|
16.3
|
|
|
$
|
—
|
|
|
$
|
87.5
|
|
|
$
|
—
|
|
Interest payment obligations
|
23.5
|
|
|
5.1
|
|
|
9.2
|
|
|
9.2
|
|
|
—
|
|
|||||
Operating leases
|
3.8
|
|
|
0.7
|
|
|
1.2
|
|
|
1.3
|
|
|
0.6
|
|
|||||
Total
|
$
|
131.1
|
|
|
$
|
22.1
|
|
|
$
|
10.4
|
|
|
$
|
98.0
|
|
|
$
|
0.6
|
|
(a)
|
Documents filed as a part of this report:
|
1.
|
Consolidated Financial Statements
|
|
Page
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibits
|
Exhibit No.
|
|
|
Description
|
3.1
|
|
—
|
Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated April 26, 2012 and incorporated by reference herein).
|
3.2
|
|
—
|
Certificate of Amendment to Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 20, 2015 and incorporated by reference herein).
|
3.3
|
|
—
|
Second Amended and Restated Bylaws (filed as Exhibit 3.2 to the Company’s Current Report on Form 8‑K dated April 26, 2012 and incorporated by reference herein).
|
4.1
|
|
—
|
Securities Purchase Agreement, dated June 17, 2007, with Invus, L.P. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 17, 2007 and incorporated by reference herein).
|
4.2
|
|
—
|
Amendment, dated October 7, 2009, to Securities Purchase Agreement, dated June 17, 2007, with Invus, L.P. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 7, 2009 and incorporated by reference herein).
|
4.3
|
|
—
|
Registration Rights Agreement, dated June 17, 2007, with Invus, L.P. (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K dated June 17, 2007 and incorporated by reference herein).
|
4.4
|
|
—
|
Stockholders’ Agreement, dated June 17, 2007, with Invus, L.P. (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K dated June 17, 2007 and incorporated by reference herein).
|
4.5
|
|
—
|
Supplement to Transaction Agreements, dated March 15, 2010, with Invus, L.P. and Invus C.V. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 15, 2010 and incorporated by reference herein).
|
4.6
|
|
—
|
Supplement No. 2 to Transaction Agreements, dated February 23, 2012, with Invus, L.P. and Invus C.V. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 23, 2012 and incorporated by reference herein).
|
4.7
|
|
—
|
Amended and Restated Purchase Option Agreement, dated July 30, 2010, with Symphony Icon Holdings LLC and Symphony Icon, Inc. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 30, 2010 and incorporated by reference herein).
|
4.8
|
|
—
|
Amendment No. 1 to Amended and Restated Purchase Option Agreement, dated September 30, 2016, with Symphony Icon Holdings LLC and Symphony Icon, Inc. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 30, 2016 and incorporated by reference herein).
|
4.9
|
|
—
|
Amended and Restated Registration Rights Agreement, dated July 30, 2010, with Symphony Icon Holdings LLC (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated July 30, 2010 and incorporated by reference herein).
|
4.10
|
|
—
|
Indenture related to the 5.25% Convertible Senior Notes due 2021, dated as of November 26, 2014, with Wells Fargo Bank, N.A. (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated November 26, 2014 and incorporated by reference herein).
|
Exhibit No.
|
|
|
Description
|
4.11
|
|
—
|
Form of 5.25% Convertible Senior Notes due 2021 (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated November 26, 2014 and incorporated by reference herein).
|
10.1
|
|
—
|
Offer Letter, dated July 1, 2014, with Lonnel Coats (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K dated July 7, 2014 and incorporated by reference herein).
|
10.2
|
|
—
|
Offer Letter, dated March 10, 2011, with Pablo Lapuerta, M.D. (filed as Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2011 and incorporated by reference herein).
|
10.3
|
|
—
|
Employment Agreement with Alan Main, Ph.D. (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2001 and incorporated by reference herein).
|
*10.4
|
|
—
|
Offer Letter, dated March 23, 2016, with Praveen Tyle, Ph.D.
|
10.5
|
|
—
|
Employment Agreement with Jeffrey L. Wade, J.D. (filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-1 (Registration No. 333-96469) and incorporated by reference herein).
|
10.6
|
|
—
|
Consulting Agreement with Alan S. Nies, M.D. dated February 19, 2003, as amended (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2010 and incorporated by reference herein).
|
10.7
|
|
—
|
Consulting Agreement with Robert J. Lefkowitz, M.D. dated March 31, 2003 (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2003 and incorporated by reference herein).
|
10.8
|
|
—
|
Form of Indemnification Agreement with Officers and Directors (filed as Exhibit 10.7 to the Company’s Registration Statement on Form S-1 (Registration No. 333-96469) and incorporated by reference herein).
|
10.9
|
|
—
|
Summary of Non-Employee Director Compensation (filed as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2015 and incorporated by reference herein).
|
*10.10
|
|
—
|
Equity Incentive Plan.
|
*10.11
|
|
—
|
Non-Employee Directors’ Equity Incentive Plan.
|
10.12
|
|
—
|
Form of Stock Option Agreement with Officers under the Equity Incentive Plan (filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2011 and incorporated by reference herein).
|
*10.13
|
|
—
|
Form of Restricted Stock Unit Agreement with Officers under the Equity Incentive Plan (filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2012 and incorporated by reference herein).
|
10.14
|
|
—
|
Form of Notice of Stock Option Grant to Directors under the Non-Employee Directors’ Equity Incentive Plan (filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2015 and incorporated by reference herein).
|
†10.15
|
|
—
|
Collaboration and License Agreement, dated November 5, 2015, with Sanofi (filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K/A for the period ended December 31, 2015 and incorporated by reference herein).
|
†10.16
|
|
—
|
License and Collaboration Agreement, dated October 21, 2014, with Ipsen Pharma SAS (filed as Exhibit 10.1 to the amendment to the Company’s Quarterly Report on Form 10-Q/A for the period ended September 30, 2014, as filed on December 23, 2014, and incorporated by reference herein).
|
†10.17
|
|
—
|
First Amendment, dated March 17, 2015, to License and Collaboration Agreement, dated October 21, 2014, with Ipsen Pharma SAS (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2015 and incorporated by reference herein).
|
10.18
|
|
—
|
Collaboration and License Agreement, dated December 17, 2003, with Bristol-Myers Squibb Company (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2015 and incorporated by reference herein).
|
Exhibit No.
|
|
Description
|
10.19
|
—
|
First Amendment, dated May 30, 2006, to Collaboration and License Agreement, dated December 17, 2003, with Bristol-Myers Squibb Company (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2015 and incorporated by reference herein).
|
†10.20
|
—
|
Second Amendment, dated November 2, 2016, to Collaboration and License Agreement, dated December 17, 2003, with Bristol-Myers Squibb Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 2, 2016 and incorporated by reference herein).
|
†10.21
|
—
|
Second Amended and Restated Collaboration and License Agreement, dated November 30, 2005, with Genentech, Inc. (filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2005 and incorporated by reference herein).
|
10.22
|
—
|
Amendment, dated June 8, 2009, to Second Amended and Restated Collaboration and License Agreement, dated November 30, 2005, with Genentech, Inc. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K/A dated June 8, 2009 and incorporated by reference herein).
|
10.23
|
—
|
Economic Development Agreement dated July 15, 2005, with the State of Texas and the Texas A&M University System (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2005 and incorporated by reference herein).
|
10.24
|
—
|
Amendment, dated April 30, 2008, to Economic Development Agreement, dated July 15, 2005, with the State of Texas and the Texas A&M University System (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 30, 2008 and incorporated by reference herein).
|
10.25
|
—
|
Loan and Security Agreement, dated April 21, 2004, between Lex-Gen Woodlands, L.P. and iStar Financial Inc., as amended (filed as Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2014 and incorporated by reference herein).
|
21.1
|
—
|
Subsidiaries (filed as Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2010 and incorporated by reference herein).
|
*23.1
|
—
|
Consent of Independent Registered Public Accounting Firm.
|
*24.1
|
—
|
Power of Attorney (contained in signature page).
|
*31.1
|
—
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
*31.2
|
—
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
*32.1
|
—
|
Certification of Principal Executive and Principal Financial Officers Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
*101.INS
|
—
|
XBRL Instance Document.
|
*101.SCH
|
—
|
XBRL Taxonomy Extension Schema Document.
|
*101.CAL
|
—
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
*101.DEF
|
—
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
*101.LAB
|
—
|
XBRL Taxonomy Extension Label Linkbase Document.
|
*101.PRE
|
—
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
*
|
Filed herewith.
|
†
|
Confidential treatment has been requested for a portion of this exhibit. The confidential portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission.
|
|
|
Lexicon Pharmaceuticals, Inc.
|
|
Date:
|
March 6, 2017
|
By:
|
/s/
LONNEL COATS
|
|
|
|
Lonnel Coats
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
March 6, 2017
|
By:
|
/s/
JEFFREY L. WADE
|
|
|
|
Jeffrey L. Wade
|
|
|
|
Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ LONNEL COATS
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
March 6, 2017
|
Lonnel Coats
|
|
|
|
|
|
|
|
/s/ JEFFREY L. WADE
|
|
Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer (Principal Financial Officer)
|
March 6, 2017
|
Jeffrey L. Wade
|
|
|
|
|
|
|
|
/s/ JAMES F. TESSMER
|
|
Vice President, Finance and Accounting
(Principal Accounting Officer)
|
March 6, 2017
|
James F. Tessmer
|
|
|
|
|
|
|
|
/s/ RAYMOND DEBBANE
|
|
Chairman of the Board of Directors
|
March 6, 2017
|
Raymond Debbane
|
|
|
|
|
|
|
|
/s/ PHILIPPE J. AMOUYAL
|
|
Director
|
March 6, 2017
|
Philippe J. Amouyal
|
|
|
|
|
|
|
|
/s/ SAMUEL L. BARKER
|
|
Director
|
March 6, 2017
|
Samuel L. Barker, Ph.D.
|
|
|
|
|
|
|
|
/s/ ROBERT J. LEFKOWITZ
|
|
Director
|
March 6, 2017
|
Robert J. Lefkowitz, M.D.
|
|
|
|
|
|
|
|
/s/ ALAN S. NIES
|
|
Director
|
March 6, 2017
|
Alan S. Nies, M.D.
|
|
|
|
|
|
|
|
/s/ FRANK P. PALANTONI
|
|
Director
|
March 6, 2017
|
Frank P. Palantoni
|
|
|
|
|
|
|
|
/s/ CHRISTOPHER J. SOBECKI
|
|
Director
|
March 6, 2017
|
Christopher J. Sobecki
|
|
|
|
|
|
|
|
/s/ JUDITH L. SWAIN
|
|
Director
|
March 6, 2017
|
Judith L. Swain, M.D.
|
|
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
46,600
|
|
|
$
|
202,989
|
|
Short-term investments
|
299,904
|
|
|
318,363
|
|
||
Accounts receivable, net of allowances of $4
|
7,492
|
|
|
911
|
|
||
Prepaid expenses and other current assets
|
3,878
|
|
|
10,137
|
|
||
Total current assets
|
357,874
|
|
|
532,400
|
|
||
Property and equipment, net of accumulated depreciation and amortization of $59,875 and $59,428, respectively
|
19,390
|
|
|
21,227
|
|
||
Goodwill
|
44,543
|
|
|
44,543
|
|
||
Other intangible assets
|
53,357
|
|
|
53,357
|
|
||
Other assets
|
461
|
|
|
433
|
|
||
Total assets
|
$
|
475,625
|
|
|
$
|
651,960
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
52,877
|
|
|
$
|
19,725
|
|
Accrued liabilities
|
32,114
|
|
|
24,757
|
|
||
Current portion of deferred revenue
|
63,372
|
|
|
76,499
|
|
||
Current portion of long-term debt
|
16,280
|
|
|
1,976
|
|
||
Total current liabilities
|
164,643
|
|
|
122,957
|
|
||
Deferred revenue, net of current portion
|
48,934
|
|
|
109,151
|
|
||
Long-term debt
|
85,167
|
|
|
100,960
|
|
||
Deferred tax liabilities
|
18,675
|
|
|
18,675
|
|
||
Other long-term liabilities
|
805
|
|
|
14,367
|
|
||
Total liabilities
|
318,224
|
|
|
366,110
|
|
||
Commitments and contingencies
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock, $.01 par value; 5,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.001 par value; 225,000 shares authorized; 104,582 and 103,860 shares issued, respectively
|
105
|
|
|
104
|
|
||
Additional paid-in capital
|
1,411,222
|
|
|
1,397,646
|
|
||
Accumulated deficit
|
(1,250,363
|
)
|
|
(1,108,934
|
)
|
||
Accumulated other comprehensive loss
|
(195
|
)
|
|
(219
|
)
|
||
Treasury stock, at cost, 306 and 237 shares, respectively
|
(3,368
|
)
|
|
(2,747
|
)
|
||
Total equity
|
157,401
|
|
|
285,850
|
|
||
Total liabilities and equity
|
$
|
475,625
|
|
|
$
|
651,960
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Collaborative agreements
|
$
|
83,182
|
|
|
$
|
129,728
|
|
|
$
|
22,593
|
|
Subscription and license fees
|
155
|
|
|
286
|
|
|
261
|
|
|||
Total revenues
|
83,337
|
|
|
130,014
|
|
|
22,854
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development, including stock-based compensation of $3,938, $3,693 and $4,020, respectively
|
178,151
|
|
|
95,187
|
|
|
89,279
|
|
|||
Increase (decrease) in fair value of Symphony Icon, Inc. purchase liability
|
(703
|
)
|
|
5,927
|
|
|
1,428
|
|
|||
General and administrative, including stock-based compensation of $3,514, $3,150 and $3,061, respectively
|
43,044
|
|
|
23,835
|
|
|
19,411
|
|
|||
Impairment loss on buildings
|
—
|
|
|
3,597
|
|
|
13,102
|
|
|||
Total operating expenses
|
220,492
|
|
|
128,546
|
|
|
123,220
|
|
|||
Income (loss) from operations
|
(137,155
|
)
|
|
1,468
|
|
|
(100,366
|
)
|
|||
Interest expense
|
(6,567
|
)
|
|
(6,722
|
)
|
|
(2,253
|
)
|
|||
Interest and other income, net
|
2,293
|
|
|
572
|
|
|
2,255
|
|
|||
Consolidated net loss before taxes
|
(141,429
|
)
|
|
(4,682
|
)
|
|
(100,364
|
)
|
|||
Income tax benefit
|
—
|
|
|
—
|
|
|
70
|
|
|||
Consolidated net loss
|
$
|
(141,429
|
)
|
|
$
|
(4,682
|
)
|
|
$
|
(100,294
|
)
|
Consolidated net loss per common share, basic and diluted
|
$
|
(1.36
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(1.31
|
)
|
Shares used in computing consolidated net loss per common share, basic and diluted
|
103,863
|
|
|
103,591
|
|
|
76,347
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive loss:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investments
|
24
|
|
|
(156
|
)
|
|
(65
|
)
|
|||
Comprehensive loss
|
$
|
(141,405
|
)
|
|
$
|
(4,838
|
)
|
|
$
|
(100,359
|
)
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
|
|
|
|||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Accumulated
|
|
Comprehensive
|
|
Treasury
|
|
|
|||||||||||||||
|
Shares
|
|
Par Value
|
|
Capital
|
|
Deficit
|
|
Gain (Loss)
|
|
Stock
|
|
Total
|
|||||||||||||
Balance at December 31, 2013
|
73,478
|
|
|
$
|
73
|
|
|
$
|
1,175,549
|
|
|
$
|
(1,003,958
|
)
|
|
$
|
2
|
|
|
$
|
(1,503
|
)
|
|
$
|
170,163
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
7,081
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,081
|
|
||||||
Issuance of common stock to designees of Symphony Icon Holdings LLC
|
666
|
|
|
1
|
|
|
5,749
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,750
|
|
||||||
Issuance of common stock under Equity Incentive Plans
|
252
|
|
|
1
|
|
|
322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
323
|
|
||||||
Issuance of common stock, net of fees
|
29,267
|
|
|
29
|
|
|
201,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
201,947
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(887
|
)
|
|
(887
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(100,294
|
)
|
|
—
|
|
|
—
|
|
|
(100,294
|
)
|
||||||
Unrealized loss on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
(65
|
)
|
||||||
Balance at December 31, 2014
|
103,663
|
|
|
104
|
|
|
1,390,619
|
|
|
(1,104,252
|
)
|
|
(63
|
)
|
|
(2,390
|
)
|
|
284,018
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
6,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,843
|
|
||||||
Issuance of common stock under Equity Incentive Plans
|
197
|
|
|
—
|
|
|
114
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(357
|
)
|
|
(357
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,682
|
)
|
|
—
|
|
|
—
|
|
|
(4,682
|
)
|
||||||
Unrealized loss on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(156
|
)
|
|
—
|
|
|
(156
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70
|
|
||||||
Balance at December 31, 2015
|
103,860
|
|
|
104
|
|
|
1,397,646
|
|
|
(1,108,934
|
)
|
|
(219
|
)
|
|
(2,747
|
)
|
|
285,850
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7,452
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,452
|
|
||||||
Issuance of common stock under Equity Incentive Plans
|
722
|
|
|
1
|
|
|
6,124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,125
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(621
|
)
|
|
(621
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(141,429
|
)
|
|
—
|
|
|
—
|
|
|
(141,429
|
)
|
||||||
Unrealized gain on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
||||||
Balance at December 31, 2016
|
104,582
|
|
|
$
|
105
|
|
|
$
|
1,411,222
|
|
|
$
|
(1,250,363
|
)
|
|
$
|
(195
|
)
|
|
$
|
(3,368
|
)
|
|
$
|
157,401
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Consolidated net loss
|
$
|
(141,429
|
)
|
|
$
|
(4,682
|
)
|
|
$
|
(100,294
|
)
|
Adjustments to reconcile consolidated net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
2,056
|
|
|
727
|
|
|
1,928
|
|
|||
Impairment of assets
|
—
|
|
|
3,597
|
|
|
13,544
|
|
|||
Increase (decrease) in fair value of Symphony Icon, Inc. purchase liability
|
(703
|
)
|
|
5,927
|
|
|
1,428
|
|
|||
Stock-based compensation
|
7,452
|
|
|
6,843
|
|
|
7,081
|
|
|||
(Gain) loss on disposal of property and equipment
|
16
|
|
|
(47
|
)
|
|
(1,631
|
)
|
|||
Amortization of debt issuance costs
|
527
|
|
|
520
|
|
|
100
|
|
|||
Deferred tax benefit
|
—
|
|
|
—
|
|
|
(70
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
(Increase) decrease in accounts receivable
|
(4,080
|
)
|
|
124
|
|
|
457
|
|
|||
(Increase) decrease in prepaid expenses and other current assets
|
6,259
|
|
|
(5,373
|
)
|
|
(128
|
)
|
|||
Increase in other assets
|
(32
|
)
|
|
(416
|
)
|
|
—
|
|
|||
Increase in accounts payable and other liabilities
|
27,650
|
|
|
6,203
|
|
|
1,266
|
|
|||
Increase (decrease) in deferred revenue
|
(73,344
|
)
|
|
171,353
|
|
|
697
|
|
|||
Net cash provided by (used in) operating activities
|
(175,628
|
)
|
|
184,776
|
|
|
(75,622
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Purchases of property and equipment
|
(231
|
)
|
|
(910
|
)
|
|
(80
|
)
|
|||
Proceeds from disposal of property and equipment
|
—
|
|
|
335
|
|
|
2,170
|
|
|||
Purchases of investments
|
(425,673
|
)
|
|
(326,446
|
)
|
|
(221,953
|
)
|
|||
Maturities of investments
|
444,156
|
|
|
210,000
|
|
|
111,444
|
|
|||
Net cash provided by (used in) investing activities
|
18,252
|
|
|
(117,021
|
)
|
|
(108,419
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from issuance of common stock, net of fees
|
3,624
|
|
|
114
|
|
|
202,270
|
|
|||
Repurchase of common stock
|
(621
|
)
|
|
(357
|
)
|
|
(887
|
)
|
|||
Proceeds from debt borrowings, net of fees
|
—
|
|
|
—
|
|
|
84,135
|
|
|||
Repayment of debt borrowings
|
(2,016
|
)
|
|
(1,859
|
)
|
|
(1,710
|
)
|
|||
Other financing activities
|
—
|
|
|
70
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
987
|
|
|
(2,032
|
)
|
|
283,808
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(156,389
|
)
|
|
65,723
|
|
|
99,767
|
|
|||
Cash and cash equivalents at beginning of year
|
202,989
|
|
|
137,266
|
|
|
37,499
|
|
|||
Cash and cash equivalents at end of year
|
$
|
46,600
|
|
|
$
|
202,989
|
|
|
$
|
137,266
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
||||
Cash paid for interest
|
$
|
6,050
|
|
|
$
|
6,270
|
|
|
$
|
1,761
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
|
|
|
|
||||
Unrealized gain (loss) on investments
|
$
|
24
|
|
|
$
|
(156
|
)
|
|
$
|
(65
|
)
|
Common stock issued in satisfaction of Symphony Icon payment obligation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,750
|
|
•
|
The delivered item or items have value to the customer on a stand-alone basis; and
|
•
|
If there is a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and within the Company’s control.
|
•
|
The consideration payable to the Company is commensurate with the Company’s performance necessary to achieve the milestone or the increase in value to the collaboration resulting from the Company’s performance;
|
•
|
Relates solely to the Company’s past performance; and
|
•
|
Is reasonable relative to all of the other deliverables and payments within the arrangement.
|
|
Expected Volatility
|
|
Risk-free Interest Rate
|
|
Expected Term
|
|
Dividend
Rate
|
|
December 31, 2016:
|
|
|
|
|
|
|
|
|
Employees
|
63%
|
|
1.1%
|
|
4
|
|
0
|
%
|
Officers and non-employee directors
|
83%
|
|
1.6%
|
|
8
|
|
0
|
%
|
December 31, 2015:
|
|
|
|
|
|
|
|
|
Employees
|
64%
|
|
1.2%
|
|
4
|
|
0
|
%
|
Officers and non-employee directors
|
81%
|
|
1.8%
|
|
8
|
|
0
|
%
|
December 31, 2014:
|
|
|
|
|
|
|
|
|
Employees
|
66%
|
|
1.2%
|
|
4
|
|
0
|
%
|
Officers and non-employee directors
|
80%
|
|
2.3%
|
|
8
|
|
0
|
%
|
|
As of December 31, 2016
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
|
|
|
(in thousands)
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
46,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,600
|
|
Securities maturing within one year:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
227,911
|
|
|
1
|
|
|
(107
|
)
|
|
227,805
|
|
||||
Corporate debt securities
|
72,188
|
|
|
1
|
|
|
(90
|
)
|
|
72,099
|
|
||||
Total short-term investments
|
$
|
300,099
|
|
|
$
|
2
|
|
|
$
|
(197
|
)
|
|
$
|
299,904
|
|
Total cash and cash equivalents and investments
|
$
|
346,699
|
|
|
$
|
2
|
|
|
$
|
(197
|
)
|
|
$
|
346,504
|
|
|
As of December 31, 2015
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
|
|
|
(in thousands)
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
202,989
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
202,989
|
|
Securities maturing within one year:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
313,105
|
|
|
2
|
|
|
(219
|
)
|
|
312,888
|
|
||||
Corporate debt securities
|
5,477
|
|
|
—
|
|
|
(2
|
)
|
|
5,475
|
|
||||
Total short-term investments
|
$
|
318,582
|
|
|
$
|
2
|
|
|
$
|
(221
|
)
|
|
$
|
318,363
|
|
Total cash and cash equivalents and investments
|
$
|
521,571
|
|
|
$
|
2
|
|
|
$
|
(221
|
)
|
|
$
|
521,352
|
|
•
|
Level 1 – quoted prices in active markets for identical assets, which include U.S. treasury securities
|
•
|
Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.), which include corporate debt securities
|
•
|
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of the Symphony Icon purchase consideration liability)
|
|
Assets and Liabilities at Fair Value
|
||||||||||||||
|
As of December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
45,093
|
|
|
$
|
1,507
|
|
|
$
|
—
|
|
|
$
|
46,600
|
|
Short-term investments
|
227,805
|
|
|
72,099
|
|
|
—
|
|
|
299,904
|
|
||||
Total cash and cash equivalents and investments
|
$
|
272,898
|
|
|
$
|
73,606
|
|
|
$
|
—
|
|
|
$
|
346,504
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,912
|
|
|
$
|
18,912
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,912
|
|
|
$
|
18,912
|
|
|
Assets and Liabilities at Fair Value
|
||||||||||||||
|
As of December 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
200,526
|
|
|
$
|
2,463
|
|
|
$
|
—
|
|
|
$
|
202,989
|
|
Short-term investments
|
312,888
|
|
|
5,475
|
|
|
—
|
|
|
318,363
|
|
||||
Total cash and cash equivalents and investments
|
$
|
513,414
|
|
|
$
|
7,938
|
|
|
$
|
—
|
|
|
$
|
521,352
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,453
|
|
|
$
|
12,453
|
|
Other long-term liabilities
|
—
|
|
|
—
|
|
|
10,362
|
|
|
10,362
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,815
|
|
|
$
|
22,815
|
|
|
Other Long-term Liabilities
|
||
|
(in thousands)
|
||
Balance at January 1, 2014
|
$
|
27,710
|
|
Change in valuation of purchase consideration payable to former Symphony Icon stockholders
|
1,428
|
|
|
Payment of base payment obligation with common stock and cash
|
(11,500
|
)
|
|
Balance at December 31, 2014
|
17,638
|
|
|
Change in valuation of purchase consideration payable to former Symphony Icon stockholders
|
5,927
|
|
|
Payment of contingent payment obligation with cash
|
(750
|
)
|
|
Balance at December 31, 2015
|
22,815
|
|
|
Change in valuation of purchase consideration payable to former Symphony Icon stockholders
|
(703
|
)
|
|
Payment of contingent payment obligation with cash
|
(3,200
|
)
|
|
Balance at December 31, 2016
|
$
|
18,912
|
|
|
Estimated Useful Lives
|
|
As of December 31,
|
|||||||||
|
In Years
|
|
2016
|
|
2015
|
|||||||
|
|
|
|
|
(in thousands)
|
|||||||
Computers and software
|
3-5
|
|
$
|
7,667
|
|
|
$
|
8,457
|
|
|||
Furniture and fixtures
|
5-7
|
|
6,003
|
|
|
6,269
|
|
|||||
Laboratory equipment
|
3-7
|
|
3,423
|
|
|
3,908
|
|
|||||
Leasehold improvements
|
7-10
|
|
296
|
|
|
240
|
|
|||||
Buildings
|
15-40
|
|
59,212
|
|
|
59,117
|
|
|||||
Land
|
|
—
|
|
|
|
2,664
|
|
|
2,664
|
|
||
Total property and equipment
|
|
|
|
|
79,265
|
|
|
80,655
|
|
|||
Less: Accumulated depreciation and amortization
|
|
|
|
|
(59,875
|
)
|
|
(59,428
|
)
|
|||
Net property and equipment
|
|
|
|
|
$
|
19,390
|
|
|
$
|
21,227
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
258,405
|
|
|
$
|
263,138
|
|
Research and development tax credits
|
44,111
|
|
|
43,728
|
|
||
Orphan drug credits
|
24,233
|
|
|
—
|
|
||
Capitalized research and development
|
86,845
|
|
|
85,385
|
|
||
Stock-based compensation
|
7,060
|
|
|
8,160
|
|
||
Deferred revenue
|
39,307
|
|
|
4,363
|
|
||
Other
|
8,432
|
|
|
8,831
|
|
||
Total deferred tax assets
|
468,393
|
|
|
413,605
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Deferred tax liability related to acquisition of Symphony Icon
|
(18,675
|
)
|
|
(18,675
|
)
|
||
Total deferred tax liabilities
|
(18,675
|
)
|
|
(18,675
|
)
|
||
Less: valuation allowance
|
(468,393
|
)
|
|
(413,605
|
)
|
||
Net deferred tax liabilities
|
$
|
(18,675
|
)
|
|
$
|
(18,675
|
)
|
|
For the Year Ending
December 31
|
||
|
(in thousands)
|
||
2017
|
$
|
16,280
|
|
2018
|
—
|
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
2021
|
85,167
|
|
|
Thereafter
|
—
|
|
|
Total debt
|
101,447
|
|
|
Less current portion
|
(16,280
|
)
|
|
Total long-term debt
|
$
|
85,167
|
|
|
For the Year Ending
December 31
|
||
|
(in thousands)
|
||
2017
|
$
|
654
|
|
2018
|
621
|
|
|
2019
|
610
|
|
|
2020
|
622
|
|
|
2021
|
635
|
|
|
Thereafter
|
647
|
|
|
Total
|
$
|
3,789
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(in thousands, except exercise price data)
|
|
Options
|
|
Weighted Average Exercise Price
|
|
Options
|
|
Weighted Average Exercise Price
|
|
Options
|
|
Weighted Average Exercise Price
|
|||||||||
Outstanding at beginning of year
|
|
4,217
|
|
|
$
|
12.35
|
|
|
3,371
|
|
|
$
|
14.98
|
|
|
3,329
|
|
|
$
|
16.94
|
|
Granted
|
|
1,370
|
|
|
10.40
|
|
|
1,207
|
|
|
6.83
|
|
|
643
|
|
|
11.76
|
|
|||
Exercised
|
|
(495
|
)
|
|
12.17
|
|
|
(19
|
)
|
|
11.14
|
|
|
(32
|
)
|
|
10.22
|
|
|||
Expired
|
|
(195
|
)
|
|
27.33
|
|
|
(187
|
)
|
|
27.29
|
|
|
(476
|
)
|
|
24.78
|
|
|||
Forfeited
|
|
(63
|
)
|
|
10.45
|
|
|
(155
|
)
|
|
8.51
|
|
|
(93
|
)
|
|
13.79
|
|
|||
Outstanding at end of year
|
|
4,834
|
|
|
11.24
|
|
|
4,217
|
|
|
12.35
|
|
|
3,371
|
|
|
14.98
|
|
|||
Exercisable at end of year
|
|
2,727
|
|
|
$
|
12.55
|
|
|
2,686
|
|
|
$
|
14.53
|
|
|
2,417
|
|
|
$
|
15.89
|
|
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
|
|
(in thousands)
|
|
|
|||
Outstanding at December 31, 2015
|
|
637
|
|
|
$
|
8.74
|
|
Granted
|
|
496
|
|
|
8.20
|
|
|
Vested
|
|
(206
|
)
|
|
9.75
|
|
|
Forfeited
|
|
(52
|
)
|
|
9.82
|
|
|
Outstanding at December 31, 2016
|
|
875
|
|
|
$
|
8.13
|
|
|
Quarter Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
|
(Unaudited)
|
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
$
|
12,494
|
|
|
$
|
20,089
|
|
|
$
|
27,717
|
|
|
$
|
23,037
|
|
Loss from operations
|
$
|
(33,871
|
)
|
|
$
|
(37,021
|
)
|
|
$
|
(34,933
|
)
|
|
$
|
(31,330
|
)
|
Consolidated net loss
|
$
|
(34,883
|
)
|
|
$
|
(38,112
|
)
|
|
$
|
(36,015
|
)
|
|
$
|
(32,419
|
)
|
Consolidated net loss per common share, basic and diluted
|
$
|
(0.34
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.31
|
)
|
Shares used in computing consolidated net loss per common share, basic and diluted
|
103,682
|
|
|
103,830
|
|
|
103,885
|
|
|
104,052
|
|
||||
2015
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
1,792
|
|
|
$
|
376
|
|
|
$
|
566
|
|
|
$
|
127,280
|
|
Income (loss) from operations
|
$
|
(26,527
|
)
|
|
$
|
(26,688
|
)
|
|
$
|
(33,677
|
)
|
|
$
|
88,360
|
|
Consolidated net income (loss)
|
$
|
(28,076
|
)
|
|
$
|
(26,074
|
)
|
|
$
|
(35,282
|
)
|
|
$
|
86,750
|
|
Consolidated net income (loss) per common share, basic
|
$
|
(0.27
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
0.84
|
|
Consolidated net income (loss) per common share, diluted
|
(0.27
|
)
|
|
(0.27
|
)
|
|
(0.34
|
)
|
|
0.76
|
|
||||
Shares used in computing consolidated net income (loss) per common share, basic
|
103,516
|
|
|
103,608
|
|
|
103,616
|
|
|
103,623
|
|
||||
Shares used in computing consolidated net income (loss) per common share, diluted
|
103,516
|
|
|
103,608
|
|
|
103,616
|
|
|
115,764
|
|
Consolidated net income, basic
|
$
|
86,750
|
|
Interest on convertible debt
|
1,277
|
|
|
Consolidated net income, diluted
|
$
|
88,027
|
|
|
|
||
Shares used in computing consolidated net income per common share, basic
|
103,623
|
|
|
Share-based compensation awards
|
1,776
|
|
|
Convertible debt
|
10,365
|
|
|
Shares used in computing consolidated net income per common share, diluted
|
115,764
|
|
|
|
|
||
Consolidated net income per common share, basic
|
$
|
0.84
|
|
Consolidated net income per common share, diluted
|
0.76
|
|
•
|
termination for “cause” shall mean termination of employment directly resulting from (a) intentional misconduct causing a material violation by the company of any state or federal laws, (b) a theft of corporate funds or corporate assets or in a material act of fraud upon the company, (c) an act of personal dishonesty that was intended to result in personal enrichment at the expense of the company or (d) conviction of a felony;
|
•
|
a “change in control” of the company shall be deemed to have occurred if any of the following shall have taken place: (a) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, or any successor provisions thereto), directly or indirectly, of securities of the company representing 50% or more of the combined voting power of the company’s then-outstanding voting securities; (b) the approval by the stockholders of the company of a reorganization, merger, or consolidation, in each case with respect to which persons who were stockholders of the company immediately prior to such reorganization, merger, or consolidation do not, immediately thereafter, own or control more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company’s then outstanding securities in substantially the same proportion as their ownership of the company’s outstanding voting securities prior to such reorganization, merger or consolidation; or (c) a liquidation or dissolution of the company or the sale of all or substantially all of the company’s assets. For the avoidance of doubt, Invus, LP being a majority owner or dropping below majority ownership does not by itself constitute a “change in control;” and
|
•
|
if you are a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of your “separation from service” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), you will not be entitled to any payment or benefit pursuant to this “Severance” section until the earlier of (a) the date which is six months after your separation from service for any reason other than death, or (b) the date of your death. The provisions of this sub-paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code. Any amounts otherwise payable to you upon or in the six-month period following your separation from service that are not so paid by reason of this paragraph shall be paid (without interest) as soon as practicable (and in all events within twenty (20) days) after the date that is six months after your separation from service (or, if earlier, as soon as practicable, and in all events within 30 days, after the date of your death). Each payment under this “Severance” section shall be treated as one of a series of separate payments for purposes of Section 409A of the Code. It is intended that any amounts payable under this letter and our or your exercise of authority or discretion hereunder shall comply with and avoid the imputation of any tax, penalty or interest under Section 409A of the Code. This letter shall be construed and interpreted consistent with that intent.
|
1.
|
PURPOSES.
|
2.
|
DEFINITIONS.
|
3.
|
ADMINISTRATION.
|
4.
|
SHARES SUBJECT TO THE PLAN.
|
5.
|
ELIGIBILITY.
|
6.
|
OPTION PROVISIONS.
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7.
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PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
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8.
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COVENANTS OF THE COMPANY.
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9.
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USE OF PROCEEDS FROM STOCK.
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10.
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MISCELLANEOUS.
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11.
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ADJUSTMENTS UPON CHANGES IN STOCK.
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12.
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AMENDMENT OF THE PLAN AND STOCK AWARDS.
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13.
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TERMINATION OR SUSPENSION OF THE PLAN.
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14.
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EFFECTIVE DATE OF PLAN.
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15.
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CHOICE OF LAW.
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(1)
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Registration Statements (Form S-8 Nos. 333-41532, 333-168678, 333-183020 and 333-210145) pertaining to the Equity Incentive Plan and to the Non-Employee Directors' Equity Incentive Plan of Lexicon Pharmaceuticals, Inc., and
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(2)
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Registration Statement (Form S-3 No. 333-198493) of Lexicon Pharmaceuticals, Inc.
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1.
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I have reviewed this Annual Report on Form 10-K of Lexicon Pharmaceuticals, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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|
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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|
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4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
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a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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|
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b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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|
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c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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|
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d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions)
|
|
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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|
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b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Lonnel Coats
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|
Lonnel Coats
President and Chief Executive Officer
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|
1.
|
I have reviewed this Annual Report on Form 10-K of Lexicon Pharmaceuticals, Inc.;
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Jeffrey L. Wade
|
|
Jeffrey L. Wade
Executive Vice President, Corporate and Administrative Affairs and Chief Financial Office
r
|
|
1.
|
Lexicon's Annual Report on Form 10-K for the year ended December 31, 2016, and to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, and
|
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Lexicon.
|
|
By:
|
/s/ Lonnel Coats
|
|
|
Lonnel Coats
President and Chief Executive Officer
|
|
By:
|
/s/ Jeffrey L. Wade
|
|
|
Jeffrey L. Wade
Executive Vice President, Corporate and Administrative Affairs and Chief Financial Officer
|