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Lexicon Pharmaceuticals, Inc. (LXRX) Announces Reacquisition of All Rights to Symphony Icon, Inc. Programs; Deal Includes $10 Million Upfront And Another Potential $50 Million Later
8/2/2010 8:33:39 AM
THE WOODLANDS, Texas, Aug. 2 /PRNewswire-FirstCall/ -- Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), a biopharmaceutical company focused on discovering and developing breakthrough treatments for human disease, today announced that it has exercised a restructured purchase option under its drug development financing collaboration with Symphony Icon Holdings LLC and acquired all the equity of Symphony Icon, Inc., thereby reacquiring all rights to LX1031, LX1032, LX1033 and the other drug programs subject to the collaboration.
"The encouraging results we have obtained with our portfolio of serotonin synthesis inhibitors, LX1031 for irritable bowel syndrome, LX1032 for carcinoid syndrome, and LX1033 for other gastrointestinal disorders, informed our decision to reacquire all development and commercialization rights to these promising drug candidates," said Arthur T. Sands, M.D., Ph.D., Lexicon's president and chief executive officer. "We have restructured our agreement with Symphony in a manner that enables us to both defer a sizable portion of the purchase option exercise price as well as make a significant portion contingent on the success of the drug candidates, allowing us to make payments as we receive licensing proceeds to fund them."
Lexicon and Symphony Icon Holdings agreed to revised terms under which Lexicon paid Symphony Icon Holdings $10 million upon closing and agreed to make certain additional deferred and contingent payments, payable at Lexicon's option in cash, common stock or a combination of cash and common stock, subject to certain conditions. The additional deferred payments, which will be due on or before July 30, 2013, will be in an amount equal to $50 million less a 50% share of the expenses Lexicon incurs for the future development of LX1031, LX1032, LX1033 and related drug candidates, subject to certain exceptions and up to an aggregate reduction of $15 million. Lexicon may make the deferred payments in whole or in part at any time that it chooses within the payment period. The contingent payments will consist of a 50% share of any consideration Lexicon receives from licensing LX1031, LX1032, LX1033 and related drug candidates up to a maximum of $30 million plus the amount of any reduction in the deferred payment amount. The contingent payments will be due if and when Lexicon receives such licensing consideration. Lexicon will make an alternative contingent payment in lieu of a share of licensing consideration in the event that Lexicon receives regulatory approval in the United States for the marketing and sale of a product resulting from such programs prior to entering into a licensing transaction for the commercialization of such product in the United States. The total of the up-front payment and all deferred and contingent payments by Lexicon will not exceed the $90 million exercise price applicable under the terms of the purchase option that were in effect before the restructured agreement was signed.
The deferred payments and the contingent payments may be paid in cash, common stock, or a combination of cash and common stock, at Lexicon's discretion, provided that at least 50% of any payment made on or prior to July 30, 2012 will be paid in common stock and no more than 50% of any payment made after such date will be paid in common stock.
LX1031 is an orally-delivered serotonin synthesis inhibitor that acts locally in the gastrointestinal tract targeting tryptophan hydroxylase (TPH), an enzyme necessary for the production of serotonin. LX1031 recently demonstrated positive results in a Phase 2 clinical trial in patients with diarrhea-predominant and mixed forms of irritable bowel syndrome (IBS-D and IBS-M). LX1032 is an orally-delivered serotonin synthesis inhibitor that acts peripherally to inhibit tryptophan hydroxylase without affecting brain serotonin levels. LX1032 is currently in a Phase 2 clinical trial in patients with carcinoid syndrome. LX1033 is a locally acting serotonin synthesis inhibitor with enhanced potency in IND-enabling studies.
Lexicon Conference Call:
Lexicon management will hold a conference call to discuss its reacquisition of the Symphony Icon programs at 3:00 p.m. Eastern Time on August 2, 2010. The dial-in number for the conference call is 888-220-1244 (within the US/Canada) or 706-679-5615 (international). The conference ID for all callers is 91995968. An archived version of the conference call will be available on the Lexicon website through August 9, 2010.
Lexicon is a biopharmaceutical company focused on discovering and developing breakthrough treatments for human disease. Lexicon currently has four drug candidates in mid-stage development for diabetes, irritable bowel syndrome, carcinoid syndrome and rheumatoid arthritis, all of which were discovered by Lexicon's research team. Lexicon has used its proprietary gene knockout technology to identify more than 100 promising drug targets. Lexicon has focused drug discovery efforts on these biologically-validated targets to create its extensive pipeline of clinical and preclinical programs. For additional information about Lexicon and its programs, please visit www.lexpharma.com.
Safe Harbor Statement
This press release contains "forward-looking statements," including statements relating to Lexicon's clinical development of LX1031, LX1032 and LX1033 and the potential therapeutic and commercial potential of LX1031, LX1032 and LX1033. This press release also contains forward-looking statements relating to Lexicon's growth and future operating results, discovery and development of products, strategic alliances and intellectual property, as well as other matters that are not historical facts or information. All forward-looking statements are based on management's current assumptions and expectations and involve risks, uncertainties and other important factors, specifically including those relating to Lexicon's ability to successfully conduct clinical development of LX1031, LX1032 and LX1033 and preclinical and clinical development of its other potential drug candidates, advance additional candidates into preclinical and clinical development, obtain necessary regulatory approvals, achieve its operational objectives, obtain patent protection for its discoveries and establish strategic alliances, as well as additional factors relating to manufacturing, intellectual property rights, and the therapeutic or commercial value of its drug candidates, that may cause Lexicon's actual results to be materially different from any future results expressed or implied by such forward-looking statements. Information identifying such important factors is contained under "Factors Affecting Forward-Looking Statements" and "Risk Factors" in Lexicon's annual report on Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission. Lexicon undertakes no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Lexicon Pharmaceuticals, Inc.