After Breakup with Sanofi, Lexicon Loses FDA CRL Appeal


Shares of Lexicon plunged more than 10% on Monday after the company announced the U.S. Food and Drug Administration (FDA) denied its appeal of a Complete Response Letter in relation to its type 1 diabetes drug Zynquista (sotagliflozin).

In March, the FDA issued a Complete Response Letter for Zynquista as a treatment for type 1 diabetes. That CRL, which was not totally surprising, was issued following a split vote from the advisory review committee assessing the safety and efficacy of the drug. The FDA’s Endocrinologic and Metabolic Drugs Advisory Committee met in January to discuss the merits of Zynquista and subsequently, they voted eight to eight on the drug’s overall benefits outweighing the risks. Zynquista is an oral dual inhibitor of SGLT1 and SGLT2, two proteins that are responsible for glucose regulation. It is being developed as an adjunct to insulin to treat adults with type 1 diabetes. Lexicon believes that Zynquista could help diabetes patients manage and maintain blood sugar levels with a lower risk of hypoglycemia.

While Lexicon was stymied by the FDA, the company said Monday that it intends to appeal the decision to the Center for Drug Evaluation and Research, or CDER. The company will hold a conference call today to explain its path forward. It is unknown when that appeal could take place. Part of that appeal is likely to include positive 52-week cardiorenal data from a pooled analysis of its type 1 diabetes trials, Tandem1 and Tandem2. In August, Texas-based Lexicon Pharmaceuticals announced that the trials showed Zynquista demonstrated changes in clinical biomarkers such as estimated glomerular filtration rate (eGFR), hematocrit, serum albumin, uric acid, systolic blood pressure and urinary albumin-to-creatinine ratio. Those changes suggest Zynquista may reduce cardiovascular risk and progression of chronic kidney disease, the company said at the time. Additionally, Zynquista demonstrated consistent lowering of blood pressure and urinary albumin-to-creatinine ratio and the drug reduced uric acid in patients, according to the results.

Although the FDA rejected Zynquista, the European Medicines Agency approved the drug in April.

Lexicon had been developing Zynquista with Sanofi but in September, the France-based company and Lexicon parted ways – and not in the most amicable fashion. Sanofi terminated the collaboration but then Lexicon claimed the company was in breach of contract. Then, Lexicon said it terminated the deal and had reached a settlement with Sanofi that included a $260 million payout from the French company. As a result of that termination, Lexicon regained all rights to Zynquista and took over full responsibility for the development and commercialization of the treatment used for both type 1 and type 2 diabetes.

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