Q1 2024 Lexicon Pharmaceuticals Inc Earnings Call

Participants

Lisa DeFrancesco; Head, Investor Relations and Strategy; Lexicon Pharmaceuticals Inc

Lonnel Coats; Chief Executive Officer, Director; Lexicon Pharmaceuticals Inc

Jeff Wade; President and Chief Financial Officer; Lexicon Pharmaceuticals Inc

Thomas Garner; Senior Vice President and Chief Commercial Officer; Lexicon Pharmaceuticals Inc

Craig Granowitz; Senior Vice President, Chief Medical Officer; Lexicon Pharmaceuticals Inc

Yasmeen Rahimi; Analyst; Piper Sandler

Presentation

Operator

Good day, everyone, and welcome to the Lexicon Pharmaceuticals's first-quarter 2024 financial results conference call. (Operator Instructions) As a reminder, this call is being recorded today, May 2, 2024.
I will now turn the call over to Lisa DeFrancesco, Head of Investor Relations and Strategy for Lexicon. Please go ahead, Lisa.

Lisa DeFrancesco

Thank you, Jamie, and good afternoon and welcome to the Lexicon Pharmaceuticals's first-quarter 2024 financial results conference call. Joining me today are Lonnel Coats, Lexicon's Chief Executive Officer and Director; Jeff Wade, Lexicon's President and Chief Financial Officer; Dr. Craig Granowitz, Lexicon's Senior Vice President and Chief Medical Officer; and Tom Garner, Lexicon's Senior Vice President and Chief Commercial Officer.
Earlier this afternoon, Lexicon issued a press release announcing financial results for the first quarter of 2024, which is available on our website at www.lexpharma.com, and through our SEC filings. A webcast of this call, along with the slide presentation is available on our website. During this call, we will review the information provided in the release, provide a corporate update, and then use the remainder of our time to answer your questions.
Before we begin, let me remind you that we will be making forward-looking statements, including statements related to safety, efficacy, clinical development, regulatory status, and therapeutic and commercial potential of INPEFA, sotagliflozin, ZYNQUISTA, LX9211, LX9851, and our other drug programs.
These statements may also include characterizations and projections relating to our commercial launch of INPEFA and heart failure, as well as the clinical development, regulatory status, and market opportunity for all of our drug program. This call may also contain forward-looking statements relating to our growth and future operating results, discovery and development of our drug candidates, strategic alliances and intellectual property, as well as other matters that are not historical facts or information.
Various risks may cause our actual results to differ materially from those expressed or implied in such forward-looking statements. These risks include uncertainties related to our commercial launch of INPEFA, our discussions with the FDA, and other regulatory authorities regarding our drug programs, the timing and results of clinical trials, and preclinical studies of our drug candidates, our dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties, and the requirements of substantial funding to conduct our planned research development and commercialization activities.
I would now like to turn the call over to Lonnel Coats. Lonnel?

Lonnel Coats

Thank you, Lisa. Good afternoon, everyone, and thank you for joining us on the call.
Now, before I begin our discussion of Lexicon's results for the first quarter of 2024, I want to acknowledge the press release that went out earlier this week announcing my retirement from Lexicon, which will be effective on my upcoming 10th anniversary with the company on July 7. I am truly blessed to have had the opportunity to spend the last decade leading this remarkable company.
I've had the privilege to work with an outstanding Board that continues to support the company, and the many amazing and talented employees who are dedicated to Lexicon's mission. It was important to me as I made the decision to embark on the next phase of my personal journey, that I'll lead this company in the strongest possible position. I'm happy to say Lexicon has never been stronger than it is today.
As we outlined at our recent Investor Day, Lexicon has a significant portfolio and pipeline of exciting opportunities. We have a remarkably strong leadership team with the capital to execute on these opportunities to create value for stakeholders.
With that, I'd like to turn this call over to our President and CFO, Jeff Wade, to begin our discussions of the results.

Jeff Wade

Thank you, Lonnel. As Lonnel mentioned, Lexicon has never been stronger than it is today. And we have made very substantial progress just in the past quarter. We continue to make progress on our heart failure launch with expanded market access, which we expect to broaden significantly starting mid year and continuing thereafter, providing the key to potentially unlock a substantial inflection in our launch trajectory in the second half of this year. We see encouraging leading indicators supporting that potential, which Tom will discuss shortly.
We achieved a path forward this past quarter for a resubmission of our new drug application for ZYNQUISTA for type 1 diabetes, offering the potential for another near term and very substantial commercial opportunity for the company. We expect to be in a position to achieve a midyear resubmission of the NDA, seeking the approval of ZYNQUISTA, as an adjunct to insulin therapy to improve glycemic control in adults with type one diabetes and chronic kidney disease.
We believe the approval of ZYNQUISTA would help address significant unmet needs in a population with no real treatment options beyond insulin to manage their blood sugar. We have also begun our efforts to expand sort of the pleasant label into hypertrophic cardiomyopathy part of an overall strategy to seek medically important and high value indications that are both unique to surgical closing among SGLT inhibitors and for which there is evidence for an advantage in inhibiting SGLT1 start-up activities for our pivotal Phase three study in HCM are well underway and we expect to begin patient enrollment around the middle of this year. We are making continued good progress in the enrollment of our Phase IIb study of LX. 91 one for diabetic peripheral neuropathic pain, which continues to be on track for top line data in the second quarter of 2025. We are increasingly confident in the opportunity for Alexander one to address a tremendous area of unmet need, both in DPNP, the focus of this study, but also in neuropathic pain more broadly at our Investor Day two weeks ago, we revealed LX. nine eight five one, a promising new oral drug candidate for chronic weight management that addresses a novel target ACSL. five with compelling biology, Alex 95 one provides additional evidence that Lexicon's unique Genome 5,000 discovery platform founded in a systematic approach to mimic genetics continues to produce. And finally, but very importantly, we were able to raise 250 million in an oversubscribed offering with strong shareholder participation to support the execution of these exciting programs.
I'll now turn the call over to Tom Gardner, Lexicon's Chief Commercial Officer, to talk more about and Peppa for heart failure and where we are with the launch. Tom?

Thomas Garner

Thank you, Jeff, and good afternoon, everyone. It's a pleasure to be able to speak with you all today. As you will see, Q1 represented another quarter of continued positive progress with the ongoing launch of Enpath. As a reminder, the commercial organization is fully aligned and focused on two key areas as it relates to the ongoing launch, namely driving awareness and demand for Enpath amongst the cardiology community while also working hard in parallel with major payers to secure profitable and equitable access for patients who can benefit from this medicine.
We have also taken thoughtful and deliberate steps to evolve and significantly strengthen the commercial organization to ensure that we can maximize the opportunities that exist for Imperva and more broadly Lexicon in both the near and midterm.
Beginning on the next slide, you can see the heart failure remains a significant burden in the United States. Today, you can see that there were about 7 million patients suffering with heart failure in the United States in 2019. And this number is expected to grow by nearly 27% by the end of the decade to about 8.5 million patients reflecting a growing and very substantial patient population where unmet needs remain. That's anticipated growth is also projected to have a substantial impact on the health care system. As a whole at the start of the decade, heart failure costs are estimated to be about $44 billion by the end of the decade. This number is expected to increase to nearly 70 billion. This clearly reflects a significant drain on resources, and we believe that in particular, is very well-positioned as a cost effective solution, which brings me to the next slide on slide 7, you can see how hospitalizations and readmissions are driving the majority of these heart failure related costs. In fact, according to the latest estimates, hospitalizations account for nearly 80% of overall costs. And when patients leave the hospital in many cases, they are readmitted very quickly with up to 25% route returning within 30 days as we've shared previously much of our clinical data for M-Pesa, specifically from the SOLOIST trial, where the NNT. was four and hospital readmissions reduced by 50% at both 30 and 90 days is very is received very positively by the clinicians who are treating patients in the inpatient setting, but also for those who are treating patients in the outpatient setting with the goal of preventing readmissions, which is one of the objectives central to guideline directed medical therapy.
Turning to the next slide, you can see that treatment with SGLT2 is really in its infancy in terms of uptake for the treatment of heart failure in Pepper is now one of the three SGLT medications that are referenced in the ACC guidelines as the only dual inhibitor of SGLT1 and SGLT2, coupled with compelling clinical evidence, we believe that Imperva offers significant value to HCPs to patients and to payers. Despite the strong recommendation within the heart failure guidelines as one of the four pillars of guideline directed medical therapy. The SGLC. class still remains somewhat underpenetrated. As of today, only around 11% of patients are actually being started on SGLT therapy for heart failure, representing a significant future opportunity for the class, including in paper. This is an area where the added medical communities really pushing very hard. The American Heart Association has to get with the guidelines program for heart failure with the primary goal of ensuring the updated guidelines are consistently pulled through into clinical practice with the goal of improving patient care and outcomes.
Turning to Slide 9. We're very excited about two recent additions to the joint guidelines established in 2022 by the American cardio College of Cardiology or ACC, AHA and the Heart Failure Society of America.
Firstly, last year, the ACC released a consensus statement for the treatment of heart failure with preserved ejection fraction, which went even further than the 2022 joint guidelines recommending SGLT inhibitors as first-line foundational therapy for all patients who have half past.
And then just a few weeks ago, we were also very pleased to see the updated consensus statement for breadth which reclassified the SGLT2 class as the SGLT-2 class SGLT class in Express recognition of Enpath has differentiated mechanism of action inhibiting both SGLT one as well as SGLT2. Taken together, we anticipate this continued support from U.S. experts in the heart failure community will result in continued growth and accelerating adoption for the SGLT inhibitor class as a whole, including Imperva across the spectrum of heart failure patients.
Now pivoting to our results for the quarter, we continued to observe encouraging results from our efforts to accelerate adoption of a pay-for for the treatment of heart failure. Awareness of M-Pesa continues to trend positively upwards and has grown by nearly 10% since January and is now in the 88% range. At the same time, we are also seeing that the intention to prescribe is increasing as more of our target customers are reach by our sales specialists and our nonpersonal efforts, encouraging ones. Cardiologists have started a patient on Imperva. They indicate very high product satisfaction, which is above similar benchmarks for comparable products in the cardiology space at this point of the product life cycle. Taking together these metrics give us confidence that impresses differentiated value proposition and core messaging is resonating with our customers and demonstrates the great potential we see for continued growth throughout 2024 and beyond.
Turning to Slide 11. As a reminder, we have focused our in-person sales efforts on the highest volume heart failure prescribers with a team of highly tenured cardiovascular specialists. The priority focus for this team is on the segment's A. through C, where we see the highest volumes of heart failure patients with the A. and B targets alone accounting for more than 60% of the overall heart failure volume in the United States.
As you move to the next slide, you will see that this focused strategy is starting to pay dividends. As you can see from the chart on the left, nearly 80% of the impact on script volume is currently coming from our A. through C. highest volume heart failure treaters.
Moving to the chart on the right, you can see how we are penetrating each priority segment encouragingly, we are seeing increased adoption of Imperva amongst these top tier customers. We focused on the very most important segment A. and B customers. Adoption of M-Pesa within this group grew by over 40% in Q1 versus Q4. While we continue to continue to see increasing adoption, we should also note that we have significant room for continued growth across both of these segments, and this is something that the team the sales team is fully focused on continuing to deliver as we broaden the prescriber base.
Moving to slide 13, you can see the continued progress we are making with the adoption of M-Pesa across the entire cardiology community as a whole. Through the end of March, we had around 1900 writers of Imperva adding in excess of 600 new customers in the first quarter, representing an increase of over 45% versus the prior quarter. This positive momentum has continued through the early part of Q2. We're really pleased with this progress and expect it to continue as we further enhance our in-person promotional tools. Our strengthened omnichannel approach while also working hard to broaden access, which may be still be viewed by customers as a barrier to product adoption at this point in the launch window.
On Slide 14, you'll see that we are continuing to build ongoing prescription volumes, even as we work to improve access conditions for in paper, we have seen encouraging upward momentum in TRx volumes throughout the quarter, but have seen this trend continue into the early part of Q2. Accelerating and improving patient pull through will remain a critical focus for the team to ensure that not only do we not only continue to accelerate new-to-brand script demand, but are able to continue and retain ongoing scripts for impact for prescribers and for their patients. The M-Pesa Together program has been carefully designed to ensure that patients prescribed an effort can be appropriately started from supported on their treatment journey irrespective of their insurance type. So as you can see from the previous slides, we are pleased with the continued positive momentum in leading indicators for impressive demand as customers become ever better acquainted with the clinical value proposition that impacts our office for their patients. It's worth noting that our overall access did not change considerably from the roughly 40% as of last quarter. Yet we have continued to see ongoing increases in total script volumes. We're currently in the midst of the 2025 Medicare bid cycle with the value and access team fully engaged in important and meaningful discussions with all major PBMs across both the commercial and Medicare books of business. We've been pleased by the receptivity. Payers have indicated to the product as they recognize. There is clinical differentiation with M-Pesa and the value proposition is compelling. They continue to express interest in reviewing imperfect for coverage and increasingly adding in pepper to their formularies.
With that, I will hand over to Jeff to talk about type 1. It is interesting.

Jeff Wade

Thanks, Tom. It has been a particular passion of our company to improve the lives of people with type 1 diabetes, and we are pleased to have found a path forward for the resubmission of our NDA for Zynquista as an adjunct to insulin therapy for the substantial proportion of this population who also suffer from chronic kidney disease type 1 diabetes is a substantial opportunity in an area of high unmet need because type one diabetes involves complete insulin deficiency due to the autoimmune destruction of beta cells in the pancreas people with type one diabetes retire rely entirely on insulin therapy, either multiple daily injections or insulin pumps to provide the insulin they need. But while insulin is lifesaving, it is also very challenging to manage with the result that between 75% and 80% of people with type one diabetes failed to meet targets for A1c, a measure of average glucose, the difficulties in managing insulin therapy also mean that unmet needs for glycemic control in type one diabetes goes far beyond A1c with glucose variability and maintaining time-in-range being particular challenges. Maintaining good glucose control is important to the day-to-day lives and well-being of people with type one diabetes, but is also important for reducing long-term complications, which include diabetic retinopathy, diabetic neuropathy, higher rates of cardiovascular disease and chronic kidney disease, notably among the 1.7 million adults with type one diabetes between 20% and 25% of chronic kidney disease and many more are at risk for progression.
Moving to slide 18, following a series of discussions with the FDA, we are preparing to resubmit our NDA for patients living with type one diabetes and chronic kidney disease. In the middle of this year. In doing so, we are leveraging the extensive clinical data generated in what was and remains the largest ever Phase three program of an oral adjunct to insulin in type one diabetes. We have the opportunity to reference a tremendous amount of additional supportive data that were generated after our original filing for approval in type one diabetes in a separate population, but still relevant, providing evidence of benefits on cardiovascular death, heart failure, myocardial infarction and stroke and kidney protection. And we have the benefit of recently published additional data from long-term longitudinal studies that shows the importance of better glycemic control and slowing the progression of chronic kidney disease in the type one diabetes population. Together, these elements open the opportunity for our resubmission for the use of Zynquista as an adjunct to insulin with the potential to improve glycemic control for people living with type one diabetes and chronic kidney disease.
On slide 19, the significant unmet needs in type one diabetes more broadly are shared by and often have particularly importance in the population of people who also have chronic kidney disease. These needs, including include reaching A1c goals, reducing glycemic variability, including time-in-range controlling complications and reducing weight gain with the overall goal of preventing further conditions or complications, including cardiovascular and kidney related diseases. The data from our Phase three program of suitable flows and then type one diabetes provides compelling evidence addressing many of these unmet needs with results consistent among the overall type one diabetes population studied and also the subgroup with type one diabetes and chronic kidney disease.
On slide 20, you can see from the patient journey in type one diabetes that there are no real treatment options beyond insulin therapy to improve glycemic control and thus potentially prevent the complications that ultimately result from sub-optimal glycemic control. And it's certainly a pleasant as a unique opportunity to fill a gap and address an important area of need in this population.
I'd like to pivot beginning with Slide 21 to discuss our plans for a potential commercial launch. The treatment of type one diabetes is highly concentrated among endocrinologists, where the top 1,000 are treating that two thirds of diabetes type one diabetes patients in the top 3,000 are treating over 90%. The concentration of prescribers and their geographic distribution supports a focused modest size field force, likely 120 or fewer in size. We are continuing our planning and preparations for commercialization as we prepare to resubmit and post acceptance and through the review process and expect to hire the T. one D focused field force very close to the potential launch early next year.
Moving to Slide 22. We are not the only ones who are enthusiastic about the opportunity for surgical flows to benefit people with type one diabetes. There are a number of studies, including some large studies focused on outcomes beyond glycemic control in the T. one D population that are usual utilizing sort of a pleasant and from which we expect to add to our body of evidence over the next several years. This includes a study called sugar and salt, which is designed to assess the outcomes of treatment with suitable flows and in patients with type one diabetes and chronic kidney disease surfaced, which looks at heart failure and type one diabetes and stent one, which looks at a reduction in cardiovascular risks in type one diabetes.
To summarize on slide 23, we expect to resubmit our NDA midyear. And given the nature of the resubmission anticipate a six month review. Prelaunch planning activities are well underway and we expect further investments related to field force to occur closer to potential approval. There is a significant unmet need and substantial advocacy group support for treatment to manage glycemic control for people who have type one diabetes and chronic kidney disease. And we expect the body of evidence will continue to grow and expand over time. We couldn't be more excited here at Lexicon to be on this journey to bring surgical closer to people with type one diabetes.
I will now turn the call over to Craig to talk about hypertrophic cardiomyopathy and why we believe that this is a great opportunity to improve care for patients, you still need better treatment options.

Craig Granowitz

Thank you. Jeff shared a lot of detail on our rationale to pursue sort of a focus in HCM at our recent Investor Day a couple of weeks ago, which is still available for review on our website.
So I'll just briefly summarize here our enthusiasm about HCM as an opportunity for clinical focus and was driven in part by a post hoc analysis of our score data demonstrated that sort of glucose and reduce the risk of cardiovascular events in patients with left ventricular hypertrophy without hypertension. This cohort shares phenotypic and physiologic traits of patients with HCM and may actually include undiagnosed cases of HCM. This analysis provides insight into the potential efficacy of sodium glucose and in patients with HCM. And there are a lot of other physiology that would support the impact of SGLT. one expression on HCM and why sort of repose and might work on the myocardium itself to achieve that end after reviewing this data and discussing with the FDA, we believe that total proposal has the potential to address key unmet needs with the scientific rationale to support development. The timing of our study could also be beneficial as heavy disease awareness efforts currently underway in the industry through new treatments as new treatments become available, but also provide additional benefit. We believe that the rate of diagnosis of HCM will likely outpace the growth of the disease itself.
Moving to the study design on slide 26, our proposed indication is to improve symptoms and physical limitations, which is what all of the agents that are currently approved are designed to do all this EMIs and all of the other agents have been designed and approved to improve physical functioning not improve long-term outcomes. We have already demonstrated long term CV outcomes from our vast heart failure clinical dataset. And importantly, we are including both obstructive and nonobstructive HCM patients in the upcoming trial. So we have a single 500 patient study with 200 patients each with obstructive and nonobstructive hypertrophic cardiomyopathy. Our KCCQ primary endpoint has been validated by the FDA as an endpoint for nonobstructive hypertrophic cardiomyopathy in registration trials of other agents. And importantly, a much broader group of patients are eligible to be included in our trial than those of the currency MIs because we're allowing patients actually to remain on a CMI to remain on their beta blocker and to be on their CCB. and we will allow an injection fraction inclusion criteria down to 50%, not the 60% that is in the CMI trials. Just a major risk of use of CMIC is that patients may develop heart failure, and we're actually indicated to reduce the development of heart failure.
Moving to Slide 27. We believe that there are significant stakeholder needs and opportunities in the HCM treatment paradigm for which sofoles and can address for patients sort of opposing as the potential for symptom improvement with very limited or no added side effects. It also has the potential to be cost effective without the need for significant patient monitoring. In this case, there would be no significant added burden to HCP offices and payers and all stakeholders could potentially benefit because of the way that it will be studied, it will also be available for use across the treatment paradigm of HCM regardless of their current therapy or only of obstructive and nonobstructive HCM status.
Moving now to LX nine two one one. We believe that Alex 91 one has a promising profile based on two completed proof of concept studies and a substantial market opportunity. 1191 one has the potential to overcome many of the shortcomings of current therapies and could become a welcome new innovation for those suffering from diabetic peripheral neuropathic pain or DPNP on a daily basis. Lexicon has been granted fast track designation by the FDA for the development of LX. nine two one one for DPNP diabetic peripheral neuropathic pain is a large and growing market with significant unmet medical need. It is estimated that more than 20 million Americans experienced in our pelvic pain and approximately 5 million CPNP. patients were identified in the U.S. in 2022. Alex 91 one has the potential to be a first to market novel non-opioid therapy in a multi-billion dollar market. Our progress Phase IIb study has an eight week treatment duration and is enrolling adult patients with a diagnosis of type one or type two diabetes with moderate to severe diabetic peripheral neuropathic pain is a four arm placebo-controlled study with approximately 400 patients or 100 per arm. It also allows patients to remain on their underlying EPS P therapy which reflects a more real world use approach. As we have shared in previous updates, we have advanced LX nine two one one into late stage development with a clinical program directed towards DPNP regulatory approval. Progress study began enrollment in December. It is designed to be a dose optimization study in order to enable a more efficient Phase three study execution increase probability of success as well as derisked investment while maintaining overall development program costs and timelines. Enrollment remains on track, and we expect a top line data in Q2 2025.
Now moving on to Alex nine, eight five one for obesity and weight management beginning on Slide 34. We recently revealed an exciting pipeline opportunity, a novel oral development candidate for chronic weight management, which we are calling LX nine eight five one with this ACSL. five inhibitor, we see the potential to address the significant opportunities beyond weight loss with GLP-1 receptor agonists in oral agent for reduction in body fat that spares lean muscle mass and improved metabolic profile and benefits beyond weight loss, including potential in additional related indications such as metabolic syndrome and Max, our work here begins with an assessment of the compelling phenotype we observed in knocking out the ACSL. five gene in mice representing what we might expect from a drug inhibiting the protein target encoded by that gene, the observed phenotype suggested that an ACSL. five inhibitor has the potential to counter all aspects of metabolic syndrome, reduce obesity, improve glucose tolerance and reduce cholesterol and triglycerides among other metabolic benefits, in particular, as seen in slide 36, in our large-scale assessment of nearly 5,000 different genes. We saw much lower cholesterol and triglycerides and low and moderate moderately lower body fat with no effect on lean body mass on a standard diet. And in slide 37, evaluating the effects of a high-fat diet revealed Another important characteristic of the target, substantially lower body fat, 25% less with no difference in lean muscle mass we have broadly reproduce these weight loss and metabolic effects with small molecule inhibitors of ACSL. five in our drug discovery efforts have now yielded a development candidate called LX. nine eight five one. As we think about the opportunity for chronic weight management. The data from one of our more recent studies help demonstrate that opportunity with LX. nine eight five one producing weight loss on its own, but importantly also being additive to the weight loss seen with GLP-1 receptor agonist semaglutide with the combination of Elyx by 9.51 and semaglutide having a greater reduction in body fat overall than either agent on its own.
And then Slide 39 as we consider the opportunity specifically for weight management after initial weight loss with the GLP-1 receptor agonist, you can see when we stopped treatment with semaglutide after day 14, we saw a return to baseline weight similar to what has been seen in humans after discontinuation of a GLP-1 receptor agonist treatment. However, when we added 9.51 after initial weight loss with semaglutide, we saw a preservation of weight loss.
In summary, we have identified a promising new development candidate for chronic weight management, addressing a novel target that is entering IND-enabling studies. It addresses many of the most important opportunities beyond initial weight loss with a GLP-1 receptor agonist, an oral agent that reduces body fat and spares, lean muscle mass that leads to an improved metabolic profile. And as benefits beyond weight loss and potential in additional related indications like metabolic syndrome and match. We presented these results at our Investor Day two weeks ago with a signal with significant additional details and we have already received a considerable amount of interest in the target and compound from potential partners.
I'd now like to turn the call over to Jeff take us through the financial results for the third quarter of 2024.

Jeff Wade

Thank you, Craig, and I will review some of the key elements of our first quarter 2024 financial results. You can find more financial details in the press release that we issued earlier today in our 10 Q that's filed with the SEC.
We ended the quarter with 355.6 million in cash and investments. We believe that our existing capital resources provide us with the appropriate level of funding to support the commercial launch of the Peppa to prepare for and potentially launch sequester and type one diabetes and to make planned investments in research and clinical development, including our Phase three study of Citic frozen HCM and our Phase IIb study of LX. 91 one in diabetic peripheral neuropathic pain. We anticipate that our existing cash and investments, together with expected product revenues will provide us with sufficient resources to manage our operations into 2026 and potentially significantly longer if we achieve the partnerships that may be optimal for certain programs, for example, enabling the Phase three global development of LXN. two one one across multiple types of neuropathic pain. As indicated in our press release, we had 1.1 million in revenues in the first quarter of 2024, almost all from net sales of Imperva and had minimal revenues in the same period of 2023.
Research and development expenses for the first quarter of 2024 increased to 14.4 million from 12 million for the corresponding period in 2023, primarily due to higher external R&D expenses, selling, general and administrative expenses for the first quarter of 2024 increased to $32.1 million from 19.1 million for the corresponding period in 2023, reflecting our investment in the commercial launch of Minda and Peppa, including higher salaries and benefits associated with the addition of the PEP US sales force and other increased primarily commercial headcount as well as increased travel and marketing costs. And total net loss for the first quarter of 2024 was $48.4 million, or $0.2 per share as compared to net loss of 39 to 31.9 million or $0.17 per share in the corresponding period of 2023. For the first quarters of 2024 and 2023 net loss included noncash stock-based compensation expense of 4.3 million and 3.4 million, respectively, as we typically do with our first quarter earnings, we are introducing our current view of our 2024 full year expense guidance. This includes expected R&D expenses of between 70 and $80 million, SG&A expenses of between 140 and $155 million and total operating expenses of between 210 to 235 million. These figures include non-cash expenses of 18 million to 20 million for stock-based compensation, depreciation and amortization. As we near the end of our prepared remarks, I think it's worth highlighting the extent of our accomplishments to date and what remarkable opportunities we have ahead. We have an approved and marketed product and paper that originated from our own discovery engine in a large and fast-growing market. In addition, we have a strong and deep pipeline encompassing label expansion and lifecycle management opportunities for surgical Flurizan, along with promising drug candidates, addressing novel targets in large markets with high unmet needs like Alex, 91 one for neuropathic pain and Alex, 95 one for obesity and weight management. Together, these assets offer remarkable opportunities both for growth and for value-generating partnerships. As we wrap up on slide 45, you can see the significant number of potential catalysts that you'll be able to track and used to measure our progress over the next 18 to 24 months and inspected expect an inflection in the pepper launch in the second half of this year. Our NDA resubmission in type one diabetes and initiation of enrollment in our study in HCM, both in the middle of this year, expected completion of enrollment this year for Alex and one in diabetic peripheral neuropathic pain with top line data in the second quarter of 2025 and progress on our new development candidate for obesity and weight management.
We are looking forward to a productive remainder of the year and sharing our progress and achievements with our stakeholders. I would like to now open up the call to take your questions.

Question and Answer Session

Operator

(Operator Instructions) [Nigel Maconomy, Maconomy]

It's Tom. Please go ahead with your question. I mean this is I mean on for Yigal Thank you for taking our questions. We have two here. So the first one for in Pipa, can you talk about it and a bit more about the gun variety and the main factors that will lead into inflection in the second half.
And a second question is on hypertrophic cardiomyopathy.
Can you talk about what mechanistically do you expect any different differences in clinical outcomes between the obstructive and nonobstructive type of HCM?

Lonnel Coats

Thank you, Aman. Let me take the first question and turn it over to Tom. I believe it's what do we believe in terms of inflection and what's leading us to believe the inflection happened in second half?
Let me start with the first part. You offset this consistently that we were we launched in the summer and we launched off cycle. So it's going to take time for us to build of access and coverage. And we're now at that point where we're starting to get that access and coming up very shortly, we feel very confident we're going to gain even greater access and to the point that Tom made earlier for seeing good growth in the absence of the kind of access is going to need to accelerate for once we get it, then that should be to further accelerate. But Tom, I will turn it over you to have more to give more specificity. And then, Craig, if you can answer the question around HCM, Tom and thankfully.

Thomas Garner

No.
So I think you kind of summarized it well, and per the comments I shared earlier on. So we if we look at how we're kind of doing in terms of driving demand, we are encouraged by some of the leading indicators that we see around just the customer perspective perspective on impact for as a whole. And clearly, when our reps get in front of our customers, they are converting them into trialists. And I think as we continue to broaden the adoption for the product, you know, with the numbers now increasing all the time 2000 writers, we're actually pleased with that kind of continued uptake. And we see on an ongoing basis, you know, accelerating claims, but also we're seeing now accelerating pull through in terms of TRx volume as well on Pearl and Al's comments. The team are now very actively engaged with all of the payers, given where we are with the 2025 bid cycle. So I think you pull all of those factors together and plan, just given what we're hearing from payers, in particular regarding the value proposition and the fact that they do seem to be quite willing and open to be considering adding and pass it to their formularies with utilization management taken off the table. I think if we can do that, coupled with all of the efforts that we have in this growing prescriber base that we feel good about where we'll be in the second half of the year. So that combination of demand and access and as you're probably well aware, you know, those two, those two things are always linked in a launch window access because demand demand begets access. We're making sure that we're working very hard on both fronts to try to achieve that.

Craig Granowitz

So Craig, maybe I'll hand over to you about HCM.
Thank you, Tom. So I'll just make you restate the question that it was about are there mechanistic differences that we believe are in place between obstructive and nonobstructive hypertrophic cardiomyopathy?
Great question. And as a as a reminder, HCM is largely due to a number of gene defects, but most of them relate to act and myosin in the interaction of actin and myosin. But and that results in what is considered diastolic dysfunction. So largely is an issue of relaxation of the myocardium and limiting the ability of the myocardium to fill adequately. And I actually what is interesting is that a lot of the benefits that are seen mechanistically with sort of ocean are acting directly on the myocardium, which we believe will actually improve the basic underlying defects.
It's also important to note that in many patients with obstructive HCM that undergo septal reduction therapy. They often progress and continue to symptomatically progress. Until again, we believe that there are more similarities in the underlying mechanism for which sort of opposing might be uniquely beneficial than our differences between what is obstructive and nonobstructive hypertrophic cardiomyopathy.

Okay, great. Thank you. Thank you for answering the questions and congratulations on the retirement. We'll announce FSIs Thanks, Aman. Appreciate it.

Operator

Yasmeen Rahimi, Piper Sandler.

Yasmeen Rahimi

Edema, this is James on for. Yes. I just first wanted to thank you. And now on behalf of the pipeline for your contributions, we have two questions. The first one is in regards to 95 one, what types of IND. studies still need to be completed? And what duration tox package are you into before entering the clinic?
And for the second question, considering there's actually a lot of off-label use for SGLT twos and non-obstructive patients is our biological reasons why vertical silos and its differentiated mechanism of action could actually positive for the space.

Lisa DeFrancesco

Great. Two questions, Craig, why don't you start with the first one ACM, and then we have our Head of Innovation available today to talk about 95 one to answer your first question. So Craig, why don't we start with you.

Thomas Garner

Yes, thank you. If you could just tack just a bit garbled at the end, so I didn't catch the whole question. Could you just restate the last part of that on the differences? I just missed the first part of it.

Yasmeen Rahimi

Yes.
Is there a biological basis? Why surgical frozen differentiated mechanism of action, Kashi work possibly better in these at nonobstructive HCM patients?

Thomas Garner

Yes, great. Great question. As we said in part to the last question, the fact that there are SGLP. one receptors on the myocardium itself, both at baseline, but are also induced during a stress conditions, both experimentally and in patients as well as Mendelian genetic studies that show that patients that have knocked down mutations in SGLT1 actually have less heart failure. We believe that the benefits that you will see with sort of a frozen will be even better than those that you might see with an SGLT. two inhibitor. So the combination of both SGLT1, which is acting directly on the myocardium and on the endothelium and in the GI tract as well as on the kidney plus the more systemic effects that you see with SGLT2 inhibitors and lowering fluid volume, increasing hemoglobin and some other factors that you can get potentially two bangs for your buck with suitable flows and both of which would be beneficial in patients with HCM.

Lisa DeFrancesco

Alan, do you want to take the second question relative I-95 one and I. and D. work?
So absolutely.

Thomas Garner

So one, we're just beginning the IND-enabling work.

Craig Granowitz

The first part of that is manufacturing the enough GMP material to do the toxicology studies and safety studies. And we're planning to do a one month Boke study in two species. So that will allow us to treat and the first patients for up to one month. And this is, I think, the 10th I&D that we've done at Lexicon. So we have a in a pretty well oiled machine to run to do the IND-enabling studies.

Lisa DeFrancesco

Thank you, Alan.
Our next question comes from Carolina release from Leerink Partners. Please go ahead with your question.

Lonnel Coats

Great afternoon, everyone for Enpath. I was curious what feedback are you getting from physicians and reps in the field on of clinical profile and differentiating features and particularly what's attracting more prescribers?

Jeff Wade

Two Enpath?

Lisa DeFrancesco

Great question. Tom, you want to take that?

Thomas Garner

Sure.

Craig Granowitz

So I think I mentioned some of the data earlier on. I mean, if you take if you take the two main studies that we have, which is SOLOIST and SCORED, obviously, SOLOIST was somewhat unique in that it was the only study of NSGLT. in patients who have been hospitalized or recently hospitalized. And I think when customers see that data, in particular, the NNT. four and as I mentioned, the fact that we reduce hospital admissions both at day 30 and 90 by over 50%. I think the vaccine is very compelling when those two data points are taken together. I think when they then look when customers and see the score days on top, which is obviously more of the kind of patients with who you'd be wanting to prevent coming into the hospital. They can clearly see that Intesa has a profile that actually fits across the entire range of heart failure patients, whether they be clearly heart failure patients where you may be looking to prevent them entering the hospital or they've actually had a episode of hospitalization and they've recently left or about to leave, he may want to prescribe the drug then or if they've been recently discharged that you ensure that they go on to the best possible treatment. And so I think those profile, those kind of key dates that's taken together as seen as compelling. The mode of action, I think is also seen as compelling for those people who appreciate that, the data that we have and obviously the evidence that we are continuing to generate around the products, specifically around areas like three point MACE and stroke, which we had data coming out of ACC is also seen as very differentiating versus the other SGLT treatments. So I think that that's the high-level story. On top of that, those messages are also resonating with payers, especially payers that are dealing with both the pharmacy and the medical benefit. And because obviously reducing and stopping these patients having to come back into the hospital after a period of hospitalization is something, but is the priority across the board. So we're pleased with the general reaction to profile on this on the whole. And as I mentioned earlier on the note, we are making significant efforts to really bolster our commercialization efforts, both in terms of in-person selling, but also thinking about third-party and omnichannel approaches as well.

Lonnel Coats

Interesting, thanks. And one more for me. Given your upcoming Phase three in HCM. Could you just help frame why KCCQ is an important measure across both obstructive and nonobstructive HCM patients, particularly in the context of the fact that a lot of us have focused on like other things like peak VO2 and with some of the CSI trials and things like that.

Lisa DeFrancesco

Great question, Craig?

Thomas Garner

Yes, thank you, Lynell. And again, I think Randy, it's a great segue from ending. The last question is that physicians who have already started using Impella in the clinic have had really good results that the patients are satisfied with the therapy. And as Tom mentioned in our prepared remarks, something on the order of over 90% of patients are satisfied and health care providers are satisfied with the therapy and I think that is really that another foundational support for why we're so excited about what we're doing with HCM. And as a reminder of what you hear from clinicians and experts is that all of these agents are approved for symptomatic relief there. The CNIs are not approved for long-term clinical benefit and increasing what you're seeing from providers and from the FDA is that some of these other physiologic marker six-minute walk or peak VO2, it's very hard to communicate that to patients and that being a meaningful benefit. But when you ask the major life better. Can you walk another flight of stairs? Do you not get winded? Do you not have a lot of the symptomatic problems that the devil, the daily lives of patients. That's what's most meaningful. And I think that's why the FDA has evolved in their own thinking. And in the more recent trials with these agents that they have allowed KCCQ. as the primary endpoint. And as a reminder, the inclusion criteria for our study is all symptomatic patients with the KCCQ below 85. And so again, it's not a matter of saying are we looking for another 10 meters walking in a six minute walk test? I mean, we're we're really focusing on the activities of daily living and I got to give the FDA a lot of credit that they've evolved in their thinking about what is most important to patients. And importantly, we have in the key secondary endpoint the New York Heart Association, which is the counterpoint. So New York Heart is the health care provider assessment of patient functionality. Kccq is the patient self-assessment of functionality. And I think having it in that order with the patient reported outcome as the primary and the health care provider assessment as the key secondary, it's a good way to go. And there's a lot of excitement in the field to participate in this trial.

Got it. Thanks.
Our next question comes from Andrew Tsai from Jefferies. Please go ahead with your question.

Yasmeen Rahimi

Hi, thanks. Congrats on the retirement and best wishes to you and everything. It's been a pleasure. And maybe the first question is about Intesa. We've directionally guided to sales see accelerate in second half 2024. So just how much do you think sales can flex specifically in Q3 and Q4? Just curious how you would define an acceleration from the current sales trajectory and then secondly, would you need to rebuild or refocus on payer access again, if type one diabetes was approved? Or can you leverage the work, you've done heart failure and apply it to type one diabetes. So then I guess the question is, I'm just trying to gauge how much sales can accelerate even further immediately if you launched in type one diabetes.

Jeff Wade

Thanks.

Lisa DeFrancesco

Andrew. First, let me say thank you for the well wishes, and I'm looking forward to my retirement, but because of those tough questions for her. But I think Jeff has an answer to that. So let me turn it to him.

Jeff Wade

So I think when you're looking at our overall coverage and it's around 40%, but a lot of that is subject to add to utilization management in terms of step edits, which in this area where the step through drugs have only been approved for heart failure relatively recently or are still early in the adoption curve. That's a pretty big obstacle. And when we're negotiating and working with payers to get on formularies with contracted coverage, we're eliminating this step at it. So when you're kind of looking at Medicare being single digits and as a chance to multiply and manyfold. So and that very opportunity to very significantly increase the commercial as well when you're thinking about access without those kind of restrictions, we think that there's an opportunity to really multiply the opportunity for the multiply and manyfold what we're looking at in terms of the EM and the revenues we're getting from and Peppa. So that I think is an important element.
The second thing is on type one diabetes, and this is a fit to address your second question type one diabetes is kind of a different market because unlike in heart failure where we're competing in type one diabetes for a given be potentially the only game in town. And it's also an area of where payers are really interested. And we were already having discussions is the minute that we announced that we were resubmitting these payer discussions favor. They're asking us about type one diabetes. And we think that we will be able to have more favorable access and type one diabetes than we have in heart failure because it's not a competitive space in terms of it's particularly as we think about that, the rebates required to be able to get access, and we're doing the groundwork now to be prepared for for that launch. So we think that that is going to be an easier road Bike and Bike good margin in that as it relates to access in type one diabetes. So hopefully that answers your question.

Yes.

Lisa DeFrancesco

The only thing I would add is that we will leverage our infrastructure. We built an incredibly talented team of people both on the access side, the medical side. So that infrastructure will be leveraged to go into T. one d. Most important decision we've made in the last eight, nine months was bringing incredible executive like Tom, who knows how to bring all those pieces together well in advance of the launch. So we definitely will be leveraging the infrastructure along with the other things that Jeff laid out, Frank.

Yasmeen Rahimi

Okay.

Lisa DeFrancesco

Thank you, guys about Andrew.
Thank you.
And our next question comes from Joseph Stringer from Needham & Company. Please go ahead with your question.

Jeff Wade

Hi.

Craig Granowitz

Thanks for taking our questions of you provided some data on the commercial opportunity for us in question in T1D, but I suppose how should we think about your commercial strategy? Are you targeting patient subgroups? Or how should we think about the stratification of patients that you would target? For example, what patients would you consider early adopters versus potential late adopters to the drug assuming approval? And is it fair to think about it in terms of, say, CKD stage or are there other important factors that we should think about?
And then And last one is on pricing, assuming approval and T. one D, how should we think about a price and pricing strategy?
Thank you.

Jeff Wade

So as I will, I'm going to address the first question is how do we think about this market? So there's 1.7 million adults who have type one diabetes and that and about 20% to 25% of those have chronic kidney disease and most people who have type one diabetes are at risk for progression to chronic kidney disease.
What I would encourage you to think about is this is not about treating chronic kidney disease. This is about providing benefit to patients and people who have type one diabetes to manage their blood glucose control who have chronic kidney disease. But that's one of multiple different things they're dealing with. And the benefit in this patient population is greater because there's greater risk of progression of chronic kidney disease. But the benefits that values that are valued by the patient are really about, you know, improving their A1C, improving time in range improving and basically reducing their risk for complications across a broad range of areas so it's really about providing benefits on glycemic control, addressing the core unmet needs in type one diabetes patients and in a population that's a greater risk for progression of chronic kidney disease. So that's the way I would encourage you to think about it.
So one of the advantages in this market is that people who have type one diabetes are very engaged in their own care. They have to be they don't really have a choice. And so as that obviously, people who are more engaged are probably more likely to be early adopters than people that are less engaged, but because people with type one diabetes and even the people who are less engaged have to be pretty much engaged in their care and because they want to avoid hypoglycemia, they want to feel better. They want to reduce glucose variability. We think that there's going to be an opportunity that really have a have a pretty rapid uptake in this patient population. And but the important part really is to frame this is not the chronic kidney disease drug. This is a type one diabetes drug that is that would be indicated in the population that has chronic kidney disease, some on pricing. We're still doing pricing work there and we're going to will we did do some refinement of that. But we think that most likely that our net pricing is just going to be more favorable. And that's the main thing that we think will be different. But we're going to do some additional work around how we look at wholesale acquisition costs and also about about the level of rebates that would be required. But if your questions, yes, that's great.

Craig Granowitz

Thank you for taking our questions.
Thank you, Joy.
And ladies and gentlemen, at this time and showing no additional questions, I'll be turning the floor back over to Jeff Wade for any closing comments.

Jeff Wade

Well, thank you, everyone, for joining us on today's call and really for your continued support of Lexicon. And as we wrap up, I just want to reemphasize how Lexicon really has never been stronger. The Company's never been in a better position to focus on next steps. We have a strong management and leadership team in place committed to growth and expansion. And that includes seamless execution, targeted and smart capital allocation and exploring and leveraging partnerships to add even more value to the Lexicon assets into the Company. And so we really appreciate you joining us, and thank you for your attention.
Ladies and gentlemen, with that, we'll conclude today's conference call and presentation, and we thank you for joining. You may now.
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