Lexicon Pharmaceuticals, Inc. Aktie

Welcome to the Lexicon Pharmaceuticals First Quarter 2026 Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, May 7, 2026.

I will now turn the call over to Lisa DeFrancesco, SVP, Investor Relations and Corporate Communications for Lexicon. Please go ahead, Lisa.

Thank you, Tricia. Good morning, and welcome to our first quarter 2026 earnings call. Joining me today are Dr. Mike Exton, Lexicon's Chief Executive Officer and Director; Dr. Craig Granowitz, Senior Vice President and Chief Medical Officer; and Scott Coiante, Senior Vice President and Chief Financial Officer.

This morning, Lexicon issued a press release announcing our financial results for the first quarter of 2026, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call, along with a slide presentation is also 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 the safety, efficacy, clinical development, regulatory status and therapeutic and commercial potential of sotagliflozin, pilavapadin, LX9851 and our other drug programs as well as our business generally. These statements may also include characterizations and projections relating to the clinical development, regulatory status and market opportunity for our drug programs and the commercial performance of INPEFA for heart failure.

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, and we refer you to our most recent annual report on Form 10-K and our other SEC filings for detailed information describing such risks.

I would now like to turn the call over to Mike Exton, our CEO.

Yes. Thanks, Lisa, and good day, everyone. Thanks for joining us this morning. Look, we began this year with an ambitious set of 2026 objectives, which are to: firstly, advance our late-stage regulatory programs, both of which have major potential milestones midyear; second, expand our internationally through both existing collaborations with Viatris and Novo Nordisk and the new collaboration for pilavapadin; and third, to remain operationally disciplined and focused, which is the foundation to support long-term growth and value creation. And I'm really excited that we've executed on all of these fronts.

Now as I reflect back at where we were last year around this time, it's truly incredible to look at the evolution of Lexicon across the board. Our strong R&D execution has resulted in significant progress across each one of our late-stage programs. And through our focus on operational excellence, including lowering our expenses, executing a successful capital raise earlier this year and establishing a new debt facility, which we just announced this quarter, we've taken the steps to ensure we're financially solid. We're on the precipice of a number of pivotal milestones in the coming months with the potential to completely reshape the future of this company as well as the treatment landscape for the patients we serve. We couldn't be more excited for what's to come.

Now to summarize our year-to-date highlights in a bit more detail. Lexicon is advancing a portfolio of novel targeted therapies in 2 main therapeutic areas, cardiometabolic diseases and chronic pain. We've made meaningful progress across each of these programs. Now starting with sotagliflozin. In hypertrophic cardiomyopathy, or HCM, we are on track to complete enrollment in the SONATA Phase III study midyear. SONATA continues to enroll well, and we're seeing strong execution as we approach enrollment completion.

Type 1 diabetes, we remain on track to resubmit our application for approval of Zynquista with the FDA by midyear, putting us in the position of a potential approval as early as this year. As a reminder, this resubmission will leverage investigator-initiated study data from the STENO1 study, and the data we've seen thus far continue to support a favorable benefit risk profile.

On the global front, our licensee, Viatris has submitted regulatory applications for SOTA in heart failure across an increasing number of markets outside the U.S. and Europe with a launch underway in the United Arab Emirates. With LX9851, a first-in-class ACSL5 inhibitor for obesity, our licensee, Novo Nordisk initiated the Phase I study in March, marking the program's entry into clinical development and triggering a second $10 million milestone payment.

We're incredibly pleased with the progress and applaud the Novo Nordisk team for how swiftly they advanced this novel treatment candidate to the clinic. We're excited to see the continued progress. And within chronic pain, we continue to deepen our understanding of the profile and potential of pilavapadin. We've met our regulatory objectives and remain in discussions with third parties regarding next steps for the program.

Now our initial objective in securing a partner for pilavapadin was really to secure nondilutive capital to support the important late-stage cardiometabolic opportunities in HCM and T1D. While we currently have no plans to fund the Phase III development for this program, the steps taken to strengthen our financial position, including our recent capital raise and refinancing of our loan facility provide us with the financial flexibility to find the right partner and explore structures that reflect the value of this novel asset, which we believe is significant.

Lastly, in addition to the strong progress on our pipeline, the team has continued to deliver on our commitment to operational excellence and strengthening our balance sheet. So lots going on, lots to look forward to.

And with that, I'll ask Craig Granowitz, our Chief Medical Officer, to provide additional color on these pipeline updates. Craig?

Thank you, Mike, and good morning, everyone. I'll start with sotagliflozin, our novel oral SGLT1 and SGLT2 inhibitor, which is in late-stage development in both HCM and type 1 diabetes. I want to take a moment and remind everyone of the important and unique effects of sotagliflozin's mechanism of action. Sotagliflozin is the only dual inhibitor of both SGLT1 and SGLT2, and I want to emphasize the importance of the SGLT1 effects.

While SGLT2 is expressed primarily in the kidney, SGLT1 is expressed in the kidney, but also in other tissues, particularly the GI tract and the heart as well as the endothelial. Inhibition of SGLT1 in the GI tract is important in postprandial glycemic control in people with T1D. And we believe the inhibition of SGLT1 in the heart has important effects on myocardial health, particularly in disease states like HCM. It is also noteworthy that SGLT1 expression is upregulated in patients with ischemic heart conditions and in patients with hypertrophic cardiomyopathy. Lexicon continues to study and publish the biology of inhibition of the dual effects of both SGLT1 and SGLT2.

As Mike mentioned, we are rapidly approaching 2 important potential catalysts for sotagliflozin, both of which are anticipated around midyear. First, for HCM, we expect enrollment of our global Phase III SONATA trial of sotagliflozin in HCM to be completed by mid-2026. This pivotal study is evaluating approximately 500 patients with HCM, randomized across 130 enrolling sites in 20 countries and includes patients with obstructive and non-obstructive phenotype.

Based on current enrollment trends, we continue to anticipate top line data from this study in the first quarter of 2027. In type 1 diabetes, we remain on track for an NDA submission of Zynquista for glycemic control in adults with type 1 diabetes based on clinical data from the STENO1 investigator-initiated trial. Based on the data from the study thus far and FDA discussions, we believe there is potential for Zynquista to be approved in 2026. On the base of our activities with SONATA-HCM trial and with the STENO study group, we believe that sotagliflozin has the potential to meaningfully advance the treatment landscape for people with HCM and for those with T1D.

With this in mind, let me tell you a bit more about what gives us confidence in sotagliflozin in these 2 indications. As a reminder, SONATA-HCM is a large global registration trial with a primary endpoint of placebo-adjusted improvement in the KCCQ CSS score and is designed to support a regulatory filing and broad label in HCM. The study randomized adults with symptomatic HCM, which includes both obstructive and nonobstructive phenotypes. With its unique dual mechanism of action, we believe sotagliflozin should provide clinically meaningful improvements in both symptoms and function in both the obstructive and nonobstructive disease.

Sotagliflozin is acting through a dual mechanism or a distinct mechanism from CMIs. Patients on a stable dose of CMI who continue to have heart failure symptoms are also enrolling in the study. What makes sotagliflozin different is that it's acting both as a hemodynamic agent and as a metabolic agent to treat HCM. To explain further, through SGLT1 inhibition, sotagliflozin acts as a metabolic agent directly on the heart to improve the heart -- the functioning of the heart muscle.

Additionally, sotagliflozin is acting as a hemodynamic agent by acting on the cardiorenal axis to improve the body's fluid balance and improve outcomes. In total, if you consider its once-daily dosing regimen, established safety profile in clinical studies and post-marketing use and proven CV outcomes in patients with heart failure, we believe that sotagliflozin has the potential to be broadly adopted in the management of HCM with a strong benefit risk profile.

In recent months, we've continued to present additional evidence supporting sotagliflozin's unique potential. In addition to recent data presented on T1D, I'd like to focus on the SOTA-P-CARDIA study of sotagliflozin at the American College of Cardiology Annual Meeting. These analyses provided further evidence of benefit across patient subgroups potentially related to its mechanism of action.

As previously reported, results from SOTA-P-CARDIA demonstrated a placebo-adjusted 19-point improvement in the KCCQ score. These new analyses showed meaningful effects of SOTA on changes in patient functioning as measured by the 6-minute walk test. Additionally, there was an impact on a number of metabolic parameters, including a reduction of epicardial fat in patients treated with sotagliflozin. While not shown in this slide, there was also a reduction in the left atrial volume in those patients treated with sotagliflozin. Collectively, the data from this study demonstrate meaningful benefits on symptoms, function and physiology, which may validate the effectiveness of SOTA in HCM for clinicians.

Turning now to Zynquista in type 1 diabetes. As we have previously discussed, the FDA has confirmed that data from STENO1, third-party funded investigator-initiated study being conducted by the STENO Diabetes Center in Denmark is adequate to support a resubmission for our NDA provided patient exposure and safety data requirements are achieved. Based on the data that we have seen to date, we are optimistic that we are on track for NDA resubmission midyear with potential approval in 2026. There are 3 key points supporting our time lines and potential for Zynquista. First, enrollment is going as expected in the trial. Second, we remain comfortable with the data and safety profile STENO1 has generated to date. And third, we are continuing to work on an ongoing basis with the FDA on the final parameters surrounding the exact formatting and submission dates for the data.

In short, there are a number of items that need to be completed in order to file midyear, but we remain on track. If approved, Zynquista will be the first and only oral adjuvant to insulin therapy ever approved for glycemic control in type 1 diabetes. Our final cardiometabolic program is LX9851, our first-in-class non-incretin oral small molecule inhibitor of ACSL5 in development for obesity and associated metabolic disorders. Global development by our licensee, Novo Nordisk continues to advance and LX9851 is now in the clinic following Novo's initiation of a Phase I study in March. We are pleased by Novo's continued enthusiasm for this candidate and its novel mechanism and how swiftly Novo has advanced this program into clinical development.

Now turning to our chronic pain program. Like sotagliflozin, pilavapadin has a broad pipeline and a pill potential. Pila is a novel investigative therapy targeting AAK1. Beyond DPNP, we believe that there are a number of potential applications for pilavapadin. The AAK1 pathway is central to a number of cellular processes such as synaptic signaling between neurons involved in pain signaling and also spasticity. With this in mind, we are conducting IND-enabling work in multiple additional neuroscience indications.

Last month, we presented 2 additional data sets at the AAN Annual Meeting that further validate the development of pilavapadin in DPNP as well as other neuroscience indications. First, we shared additional efficacy data from the PROGRESS-3 Phase IIb study supporting the selection of pilavapadin 10 milligrams for Phase III development in DPNP.

Following the top line results from the PROGRESS Phase II study last year, we knew we needed to deepen our understanding of these results through additional analyses. The data presented at AAN provided additional validation needed to advance pilavapadin 10 milligrams as well as a deeper understanding of the profile of this novel mechanism. The data we have seen to date give us further confidence that pilavapadin is Phase III ready in DPNP.

Second, we presented preclinical evidence supporting pilavapadin as a novel oral therapy for spasticity, including evaluation in preclinical models of multiple sclerosis and spinal cord injury. The data shared at AAN underscore the opportunity to expand the potential of pilavapadin beyond DPNP, consistent with the pipeline in a pill opportunity that we have discussed.

I'll now turn it over to Scott to provide an update on the company's financials.

Thank you, Craig. I'll begin with a summary of our results for the first quarter of 2026. Total revenues were $21.1 million for the quarter compared to $1.3 million for the corresponding period in 2025. Revenues for the first quarter of 2026 include 2 $10 million milestones recognized from the Novo Nordisk agreement and net sales of INPEFA of $1.1 million.

Research and development expenses for the first quarter of 2026 were $12.8 million compared to $15.3 million in the corresponding period of 2025, reflecting lower external research expense in 2026 due to the completion of our PROGRESS Phase IIb clinical trial and the licensing of LX9851 to Novo Nordisk. Selling, general and administrative expenses for the first quarter of 2026 were $9.2 million compared to $11.6 million in the corresponding period of 2025. The decrease in 2026 reflects reduced marketing efforts and lower personnel costs.

Net loss for the first quarter of 2026 was $1.0 million or less than $0.01 per share compared to a net loss of $25.3 million or $0.07 per share in the corresponding period of 2025. Net loss for the first quarter of 2026 included noncash stock-based compensation expense of $3.1 million. As of March 31, 2026, Lexicon had $199.7 million in cash, cash equivalents, short-term investments and restricted cash as compared to $125.2 million as of December 31, 2025. Total debt as of March 31, 2026, was $49.7 million as compared to $54 million as of December 31, 2025.

I'd like to now highlight a few items from the first quarter. As I mentioned, revenue for the first quarter included 2 $10 million milestones recognized under our Novo Nordisk licensing agreement. Quarter-over-quarter, our operating expenses decreased by $4.8 million, reflecting our continued operational discipline and the strategic repositioning we began implementing in late 2024. We are also reaffirming our full year 2026 outlook for operating expenses.

Earlier this week, we took steps to improve our balance sheet and enhance our financial flexibility. We announced a $100 million debt facility with Hercules Capital. Under the terms of this agreement, an initial tranche of $55 million was funded at closing and was utilized to repay our existing loan facility with Oxford Finance. A second $20 million tranche is available for draw at Lexicon's option, subject to the achievement of certain clinical, regulatory and financial milestones and specified time requirements. A third $25 million tranche is available for draw at Lexicon's option, subject to Hercules consent and specified timing requirements.

The loan facility provides for an initial interest-only period of 18 months with the potential for 2 6-month extensions. We are incredibly pleased with our financial accomplishments thus far in 2026, including the completion of our capital raise in February and our new loan facility with Hercules. We have strengthened our balance sheet and improved our financial flexibility while remaining prudent with our expenses ahead of our important milestones in the back half of this year.

I will now turn it back to Mike for closing remarks.

Yes. Thanks, Scott. Now before we turn to Q&A, I just want to reiterate how -- just how pivotal year 2026 is for Lexicon. To ensure success for the year and to get us to this point where in H2, we will have a number of important things happen for the company, we've done 2 things. We've taken steps, firstly, to strengthen our financial foundation over the last few months. And second, we've executed incredibly well. And as a result, we have many significant milestones just weeks away.

I'm excited for how the opportunities are really shaping up for us, both with our own actions, but also importantly, within the external environment, which is favoring our approach across the board for all of our programs. For HCM, as the field evolves and awareness of both obstructive and now importantly, nonobstructive disease really advance. We are well positioned with a therapy that has the potential for a strong benefit risk profile and ease of use at a time where market awareness will be high and the need will clearly remain significant.

In T1D, we haven't given up. Indeed, our result is strengthened by the ongoing constructive dialogue with the FDA. Indeed, we're close to being able to submit new clinical data that we believe demonstrates a strong benefit risk for Zynquista with people with T1D, supported by high unmet need and strong patient support for approval.

With pilavapadin, we're pursuing the right strategic partner to allow for the greatest potential for this novel asset at a time when the pain therapeutic space and legislative and regulatory environment are increasingly in our favor of new novel non-opioid approaches. And finally, with LX9851, our licensee, Novo Nordisk continues to prioritize the clinical development of the asset. And indeed, just yesterday, highlighted 9851 in their earnings call.

So by next quarter, even in just the next few weeks, we believe we'll be able to share a number of positive developments, and we thank you for your continued attention and support.

And with that, I'll turn it back to you, operator, to guide us through the Q&A.

[Operator Instructions] And your first question comes from the line of Andrew Tsai with Jefferies.

It's Brian here on for Andrew. Just given the ACACIA data in nonobstructive that just hit with aficamten, how does that make you feel about your own SONATA Phase III? And if you can just talk about potential differentiation there as well, please?

Yes. No, thanks, Brian. I appreciate the question. So look, I think first and foremost, it's really an exciting time to be in the field of HCM. I think there's a lot of enthusiasm and a lot of patient need. And what we saw yesterday from the ACACIA study really gives us a lot of confidence that we have an asset where we believe we will have an incredibly strong benefit risk profile. We know the safety of sotagliflozin through many years of study and many thousands of patient exposure.

And if SONATA is positive, we believe that represents a strong benefit risk profile. And really, the opportunity, particularly in nonobstructive is incredibly large. And so we're really buoyed by that, and it gives us confidence in our step moving forward, particularly because with a strong benefit risk profile, together with that simple once-a-day oral dosing, we really see ourselves positioned particularly in nonobstructive as a first-line therapy. It makes a ton of sense where you don't have a REMS, you're a simple, well-known, safe product that provides significant symptom relief that first-line asset can work very well for us.

And importantly, really, these are 2 very different mechanisms. And like many types of cardiometabolic disease, using multiple mechanisms for shots on goal to relieve symptoms and improve outcomes is typically done. So we're incredibly pleased that we have a strong opportunity in non-obstructive and obstructive disease.

Yes. I'll just add, Brian, a couple of other points. Thank you, Mike, for your comments. As Mike mentioned, the mechanisms of action here are not in conflict. In fact, they're probably complementary I think the general feeling in the field is that CMIs are acting primarily as hemodynamic agents. And as I tried to mention in my prepared remarks, SOTA is acting as a hemodynamic agent in a different manner, really acting on the cardiorenal axis and also improving a number of other parameters, some weight loss, increase in hemoglobin, decrease in blood pressure, all of which are beneficial for the heart in any heart failure state.

And in addition, we believe that the SGLT1 effects with SGLT1 receptors upregulated, particularly in the myocardium that acting directly on the heart muscle tissue in a way that is novel and distinct from a CMI is important. As we've mentioned in prior calls, we have not excluded patients on CMIs in this trial. And I can tell you that we are enrolling symptomatic patients on CMIs. Obviously, they're all mavacamten because that was the only product that's been commercially available heretofore.

I also think that the results from ACACIA had, I would say, at least on a median basis, a relatively modest effect on KCCQ score. And if the patients had baseline KCCQ scores similar to what was seen in ODYSSEY, my guess is a number of those patients will still remain symptomatic and will require additional therapy, which is consistent with what we're seeing in our trial enrollment that all the patients that are on CMIs remain symptomatic.

So I think in that regard, as Mike said, the biggest issue in nonobstructive is going to be patient identification because people have not been looking for nonobstructive disease and I think historically have just sort of lumped them into a slightly different variant of HFpEF. And I think that differentiation of a much thicker left ventricular wall has probably not been appreciated to date and having another company out there really talking about the importance of nonobstructive HCM as a separate disease state from HFpEF, I think will be extraordinarily important for the field and for Lexicon.

Your next question comes from the line of Yigal Nochomovitz with Citigroup.

This is Caroline on for Yigal. We're wondering if you can tell us what percent of enrollment in the Phase III SONATA-HCM study has been completed? And how is the split in enrollment trending between obstructive and nonobstructive patients? Is there a risk of too many nonobstructive patients relative to obstructive patients given some obstructive patients are currently being treated with CMI, which you've mentioned before? And what if the enrollment is weighted more towards one group or the other?

Yes. Great questions. I'll answer them in the order that you asked them. We haven't given exact numbers of enrollment, but I can say confidently that we reaffirm the time lines that we have with enrollment middle of this year in terms of last patient first visit of 500 target patients. We've seen, as expected as all the sites come online, the expected and dramatic uptick in enrollment as the sites open and become familiar with the study and its availability.

The distribution of patients, again, I don't want to comment too early before we finalize enrollment. I think as we've said, the need is larger in the nonobstructive group since there is an obstructive therapy available with CAMZYOS during the duration of the trial, but we are enrolling significant numbers of both obstructive and nonobstructive patients in the trial.

[Operator Instructions] And your next question comes from the line of Yasmeen Rahimi with Piper Sandler.

This is Dominic on for Yas. Congrats on the great quarter. We just had a few questions and then kind of going along with some of the conversation about enrollment. At the time of enrollment completion in mid-2026 for SONATA, would you potentially unveil baseline demographics? And then kind of in line with that, do you have any thoughts on how similar SONATA's patient population will look to ACACIA for the recent readout? And we have one more question just on what would be a clinically meaningful difference in KCCQ? And what did you power SONATA for on this endpoint?

Yes. Thanks, Dominic. Let me start up and then Craig can take some of the detailed SONATA questions as well. So we haven't finalized exactly the information that we will release at the time of enrollment, but we're certainly committed and understand that there's interest across a number of parameters. Of course, this split as given by the questions that are coming, the split of obstructive, nonobstructive is of interest and to really get the final baseline dems to compare that to SONATA.

So we will -- we're very cognizant of that, and we will determine over the coming weeks exactly what we will release when. So we haven't sort of finalized, but we will be providing updates because we are cognizant that, that's important for folks to understand.

As it comes to the sort of the SONATA specific questions, I might let you take those, Craig.

Yes. Thanks, Mike. I hope I have your questions correct. I'll answer the one on demographics first. Again, we're still enrolling the trial and ACACIA has not really, to my knowledge, given details on the demographics similar to what was done with ODYSSEY since ODYSSEY is now already published. But I think we're seeing a patient population similar to what has been reported for ODYSSEY. You're really looking at a population in their mid-50s to 60, pretty symptomatic disease, a good distribution by gender, equal distribution of gender.

So we have a population, I think, was very consistent with what we expected, particularly the demographic and the geography that we're enrolling in this trial, which is U.S. and across Europe. So I think in that regard, we've not seen anything unexpected. We haven't looked at detail yet at the KCCQ scores or anything else. But certainly, we know that patients are symptomatic that are coming into the disease.

And broadly similar entry criteria, right?

Yes. Exactly, Mike. Yes. Thank you. Very similar entry criteria to the other trials. Clinically meaningful KCCQ score, I think the field is generally focused on 5, 4 to 5 as a number. I think there may be a rethinking of that in light of some of the more recent study results that have come out. But certainly, historically, that has been seen as an important threshold for clinical meaningfulness. And that's how we powered our trial is based on that range. Again, we haven't given the exact statistical plan that we're using, but we can certainly detect in that range comfortably with a high degree of probability of success.

And I do think that is going to be a real point of discussion in the field of risk benefit with modest improvements in KCCQ, but with potential for safety concerns and monitoring, I think those are going to be important discussions that the field will be having as the field of nonobstructive HCM is further discussed at upcoming medical meetings and probably also with payers and regulatory authorities.

And there are no further questions at this time. I will now turn the call back over to Mike Exton for closing remarks.

Thanks so much, everyone. Thanks for tuning in and listening to our update. As I mentioned, the team has really worked incredibly hard to put us in a strong financial and strategic position and to execute across all of our programs. And we're really looking forward to H2 here in 2026.

I think as you see from our remarks, we've got many things that we've been working on diligently over the last week while are going to come to fruition. And so I really look forward to updating you with a lot more information in the not-too near future. So have a great day and look forward to speaking with you all again soon. Thank you very much.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Welcome to the Lexicon Pharmaceuticals Fourth Quarter and Full Year 2025 Financial Results Conference Call [Operator Instructions] As a reminder, this call is being recorded today, March 5, 2026. I would now like to turn the call over to Lisa DeFrancesco, SVP, Investor Relations and Corporate Communications for Lexicon. Please go ahead, Lisa.

Thank you, Michelle. Good morning, and welcome to our Q4 and full year 2025 earnings conference call. Joining me today are Dr. Mike Exton, Lexicon's Chief Executive Officer and Director; Dr. Craig Granowitz, Senior Vice President and Chief Medical Officer; and Scott Coiante, Senior Vice President and Chief Financial Officer. This morning, Lexicon issued a press release announcing our financial results for the fourth quarter and full year of 2025, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call, along with a slide presentation is also 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 the safety, efficacy, clinical development, regulatory status and therapeutic and commercial potential of sotagliflozin, pilavapadin, LX9851 and our other drug programs as well as our business generally. These statements may include characterizations and projections related to the clinical development, regulatory status and market opportunity for our drug programs and commercial performance of INPEFA for heart failure.

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, and we refer you to our most recent annual report on Form 10-K and other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Exton. Mike?

Yes. Thanks, Lisa. Good day, everyone. Thanks for joining us today. As I reflect back on this year, my first full year as CEO at Lexicon, I'm enormously proud of all the progress we've made. In addition to all we've accomplished in 2025, we've had a tremendously productive start to this year. So we're excited to give you some updates on our recent progress and discuss the many important milestones ahead of us in 2026.

By way of a high-level overview, Lexicon is advancing 3 very strong novel late-stage programs in the therapeutic areas of cardiometabolic disease and chronic pain. In cardiometabolic, we have sotagliflozin, which is currently in late-stage development in hypertrophic cardiomyopathy. Also planning an NDA submission for sotagliflozin in type 1 diabetes and collaborating with our licensee, Viatris on making sotagliflozin available in patients outside the U.S. and Europe. We also have our novel oral early-stage program in obesity, LX9851, which is being advanced by Novo Nordisk. Within chronic pain, we have pilavapadin, a Phase III-ready drug candidate for diabetic peripheral neuropathic pain.

Each of these programs have key potential catalysts upcoming, which we'll cover shortly. Any one of these programs alone would represent a significant opportunity and scientific achievement to be excited about. But taken together, they comprise a portfolio that we're quite proud of. Now before I jump into the details and next steps for each of these programs, I want to emphasize that in addition to the R&D excellence behind this pipeline, we've also been diligent about driving operational excellence as well as improving our financial position and cost structure to sustainably support our core programs going forward.

So looking ahead, we've set clear goals for what we need to achieve in 2026. The SONATA-HCM Phase III trial of SOTA for obstructive and nonobstructive HCM is enrolling well, and we expect to complete enrollment in the middle of this year. We received feedback from FDA that data from the third-party STENO1 study can support an NDA resubmission for Zynquista for glycemic control in type 1 diabetes, if supported by patient exposure and safety data from the study.

Now based on the data we've seen thus far, we expect to resubmit in 2026 with potential approval later this year. Our partnership strategy continues as we support our existing licensees, Novo Nordisk and Viatris while also exploring new partnerships where appropriate to augment our capabilities, including seeking a partner for Phase III development of pilavapadin. And last but not least, we're financially well positioned following our recent capital raise. We plan to maintain our operational discipline to support long-term growth with diligent expense management and continued focus on deploying capital towards the highest value, highest impact opportunities.

Collectively, this truly demonstrates our lead to succeed strategy in action. Now we entered 2026 with significant momentum, and that has really continued in the first few months of the year. In January and February alone, we announced a successful end of Phase II meeting with pilavapadin in DPNP with no objections raised by the FDA to advancement into Phase III development.

We strengthened our financial position with more than $100 million in additional cash from our recent capital raise as well as the Novo Nordisk milestone payment. We continued enrollment in the ongoing SONATA-HCM Phase III study of sotagliflozin for HCM, surpassing 50% enrollment completion earlier this quarter and progressed our work towards a potential resubmission of our NDA for Zynquista in type 1 diabetes later this year if the STENO1 patient exposure and safety data requirements identified by the FDA are achieved. So as you can see, we're very much up and running and so much more to come. With that, I'll ask Craig to provide a deeper dive on our lead programs. Craig?

Thank you, Mike, and good morning, everyone. As most of you know, our pipeline is focused in 2 primary therapy areas, the first being cardiometabolic disease and the second being chronic pain. I'll start with our cardiometabolic platform and sotagliflozin. As we approach important upcoming milestones for sotagliflozin in both HCM and T1D, it is an opportune time to review sotagliflozin's unique mechanism of action.

As the only dual inhibitor of both SGLT1 and SGLT2, we want to focus on the importance of the SGLT1 effects. While SGLT2 is expressed primarily in the kidney, SGLT1 is expressed in the kidney, but also in other tissues, particularly the GI tract and the heart as well as the endothelium. We believe that inhibition of SGLT1 in the GI tract is important in postprandial glycemic control in patients with T1D. Similarly, we believe that inhibition of SGLT1 in the heart has important effects on myocardial health, particularly in disease states like HCM.

It is also thought that inhibition of SGLT1 and endothelium may be important in reduction of ischemic events like stroke and MI. The graphic on the next slide demonstrates the distribution of SGLT1 and SGLT2 protein expression in human tissues. On the right-hand side of the panel, it is evident that SGLT2 expression occurs primarily in the kidney. SGLT1 but not SGLT2 is expressed in the GI tract and heart. It is also noteworthy that SGLT1 expression in the heart is significantly upregulated in patients with ischemic heart conditions and in patients with hypertrophic cardiomyopathy.

We will continue to discuss these and other factors contributing to the growing body of evidence supporting the potential benefit of SGLT1 inhibition for the treatment of HCM in the coming months. The mechanistic differentiation leads us to the rationale behind our current development efforts for sotagliflozin, a potential first-in-class therapy for HCM and glycemic management in type 1 diabetes. Regarding HCM, interest and awareness of the disease has been growing, particularly with new treatment options becoming available, but this disease remains an area of severe unmet need for both people with obstructive HCM and particularly those with nonobstructive HCM.

Our SONATA-HCM Phase III study includes patients from both populations and top line results are expected in the first quarter of 2027. In type 1 diabetes, Lexicon has been committed to the development of a novel treatment for glycemic control in patients for T1D for many years. The FDA has provided feedback that clinical trial data from STENO1, a third-party funded investigator-initiated study of sotagliflozin may support a resubmission of our NDA for Zynquista in T1D.

Based on the study data we've seen to date, we're preparing to resubmit the NDA and potentially receive regulatory approval in 2026. Elaborating further on the opportunity for HCM, our Phase III SONATA-HCM study is a large global registrational trial with a KCCQ endpoint designed to support a regulatory filing and broad label in HCM. We have completed the initiation of our target 130-plus study sites in approximately 20 countries across the United States, Europe, Israel and Latin America.

I could not be more proud of the team's significant efforts in achieving this goal. SONATA is the only registrational trial currently enrolling patients with both obstructive and nonobstructive HCM. The study is pragmatic in design, allowing for patients currently being treated on a CMI. The enrollment in the study is stratified but not capped. And as Mike mentioned, we have surpassed a 50% enrollment target earlier this quarter and on track to complete enrollment by midyear.

As I mentioned earlier, as a dual inhibitor of SGLT1 and SGLT2, we believe that sotagliflozin could offer distinct advantages for the treatment of obstructive and nonobstructive HCM. Importantly, it is the only drug to our knowledge in clinical development for HCM that works both inside and outside the heart. It acts directly on the myocardium to modify cellular energetics, and we believe it has the potential to be a first-line agent with no REMS in both obstructive and nonobstructive HCM. Additionally, sotagliflozin is already approved for heart failure with no observable -- no observed risk of AFib to date.

This is important given that many patients who have HCM go on to experience major adverse cardiovascular events such as myocardial infarction, stroke or heart failure. Complementing the upcoming clinical results from the SONATA-HCM trial are 2 investigator-initiated trials, the SOTA-P-CARDIA and the SOTA-CROSS studies. SOTA-P-CARDIA, data from which was presented at the American Heart Association meeting last November, evaluated the effects of sotagliflozin in patients with HFpEF without diabetes with a baseline ejection fraction greater than 50%.

Clinically, these patients have a number of symptomatic and anatomical characteristics similar to those with nonobstructive HCM. Data from SOTA-P-CARDIA showed improvements in patient symptoms such as KCCQ score and 6-minute walk test as well as cardiac functions such as left ventricular mass and left atrial filling pressure, findings which support the rationale for sotagliflozin's use in nonobstructive HCM. SOTA-CROSS is a crossover study evaluating sotagliflozin in symptomatic nonobstructive HCM. This is an ongoing 12-week crossover study with a readout expected in 2027, measuring a number of outcomes, including cardiac function, symptoms and biomarkers.

Moving on to the next slide. There is a growing body of evidence that supports sotagliflozin's unique potential for reducing cardiovascular events. This slide highlights recent data presented at the AHA scientific sessions in the HCM Society and an upcoming presentation at the American College of Cardiology's 75th Annual Scientific Sessions that highlights sotagliflozin's impact on cardiac remodeling in HCM, the benefits of sotagliflozin in HFpEF and sotagliflozin's effects on MACE events in patients with type 2 diabetes.

In summary, we are excited to complete enrollment in SONATA-HCM and look forward to upcoming data presentations at ACC and several HCM-related medical meetings in the second half of this year. Now turning to Zynquista, our sotagliflozin program in type 1 diabetes. As we previously announced, we had productive meetings with the FDA in late 2025, during which they confirmed that STENO1, a third-party funded investigator-initiated study of sotagliflozin being conducted by the STENO Diabetes Center in Denmark, appears to be sufficient to support a review of a resubmission of our NDA for Zynquista in T1D.

Based on current STENO1 enrollment estimates and safety data we've received to date, we're planning for an NDA resubmission and potential regulatory approval in 2026. There are approximately 1 million patients with type 1 diabetes in the United States, and there has not been a new therapy approved for over a century to help those patients achieve glycemic control alongside insulin. That is an unacceptable status quo. The outpouring of support for Zynquista from the diabetes community has been remarkable and reinforces what we've always known.

These patients desperately need new treatment options. If approved, Zynquista would be the first and only oral therapy in its class for type 1 diabetes. It's not just a commercial opportunity, though certainly it is, but it's a chance to fundamentally improve how we treat this challenging medical condition. Global development of LX9851 in obesity remains on track, and our progress on this program triggered a $10 million milestone payment in February under our license to Novo Nordisk with potential for another $20 million in additional milestones in 2026.

We have now fully handed off development to Novo Nordisk following the completion of IND-enabling activities, and we are encouraged by the continued enthusiasm for this asset and its novel mechanism. Just this week, the Journal of Endocrine Society highlighted our recent publication on ACSL5 inhibition as a featured article. These preclinical data provide some insights as to the potential of ACSL5 as a target and LX9851 as a drug candidate for obesity and chronic weight management.

In addition to our cardiometabolic programs, Lexicon also has a Phase III-ready non-opioid asset for neuropathic pain, pilavapadin. Pilavapadin is a novel investigative agent targeting AAK1. And like sotagliflozin, pilavapadin has a broad pipeline and a pill potential. Our lead indication for pilavapadin is DPNP, supported by 2 Phase II studies that provide evidence of consistent and clinically meaningful pain reduction. We have accumulated data from more than 600 patients treated with pilavapadin and have demonstrated a well-understood and acceptable safety and tolerability profile.

Beyond DPNP, we believe there are other potential applications for pilavapadin. The AAK1 pathway is central to a number of cellular processes such as synaptic signaling between neurons involved in pain signaling and spasticity. With this in mind, we are conducting IND-enabling work in multiple exciting neuroscience indications. As Mike mentioned, we had a successful end of Phase II meeting with the FDA for pilavapadin in DPNP. During that meeting, FDA raised no objections to the advancement of pilavapadin into Phase III development in that indication.

The Phase III program would include 2 placebo-controlled 12-week 2-arm registrational studies comparing the 10 milligram daily dose of placebo. The primary endpoint of the Phase III study would be placebo-controlled change in average daily pain score from baseline to week 12. The FDA also confirmed that it will not require any additional preclinical or preclinical studies that would be expected to complicate or delay the advancement of this program into Phase III development and potential regulatory submission. With this regulatory alignment in hand, we are continuing our ongoing discussions with potential partners for pilavapadin. I will now turn it over to Scott to provide an update on the company's financials.

Thank you, Craig. We begin this morning with our results for both the fourth quarter and full year of 2025. Total revenues were $5.5 million and $49.8 million for the quarter and year ended December 31, 2025, respectively. Revenues for the fourth quarter of 2025 include $4.3 million of licensing revenue recognized from the Novo Nordisk agreement and net sales of INPEFA of $1.1 million. Revenues for the year ended December 31, 2025, include $45 million of licensing revenue from the Novo Nordisk agreement and $4.6 million of net sales of INPEFA.

Total revenues for the fourth quarter and full year 2024 include the upfront payment of $25 million received upon entering into the Viatris license agreement and net sales of INPEFA of $1.6 million and $6 million, respectively. Research and development expenses for the fourth quarter of 2025 decreased to $11.3 million from $26.7 million in 2024. Full year 2025 research and development expenses decreased to $61.1 million from $84.5 million in 2024, primarily reflecting lower external research expenses from our PROGRESS Phase II clinical trial, partially offset by increased investment in our SONATA Phase III clinical trial.

Selling, general and administrative expenses for the fourth quarter of 2025 decreased to $8.8 million from $32.3 million in 2024. Full year 2025 SG&A expenses decreased to $37.3 million from $143.1 million in 2024. The decrease in 2025 reflects lower costs resulting from the company's strategic repositioning in late 2024 and our significantly reduced marketing and promotional efforts for INPEFA in 2025. Net loss for the fourth quarter of 2025 was $15.5 million or $0.04 per share compared to a net loss of $33.8 million or $0.09 per share in the corresponding period in 2024.

Net loss for the full year 2025 was $50.3 million or $0.14 per share compared to a net loss of $200.4 million or $0.63 per share in the same period in 2024. For the fourth quarters of 2025 and 2024, net loss included noncash stock-based compensation expense of $2.8 million and $1.5 million, respectively. And for the full years of 2025 and 2024, net loss included noncash stock-based compensation expense of $12.5 million and $13.5 million, respectively. As of December 31, 2025, Lexicon had $125.2 million in cash, investments and restricted cash as compared to $238 million in cash and investments as of December 31, 2024.

Subsequent to year-end, Lexicon strengthened its cash position by more than $100 million from net proceeds received from the sale of common and preferred stock and a milestone payment from Novo Nordisk. I'd like to now note a few financial highlights from both the fourth quarter and full year 2025. In addition to the revenue highlights, which I mentioned previously, operating expenses were reduced by $39 million for the fourth quarter of 2025 as compared to the fourth quarter of 2024. We continue to look for ways to reduce costs and streamline our operations. We also meaningfully improved our cost structure for 2025 with operating expenses down $129.5 million for 2025 as compared to '24 reflecting our strategic repositioning in late 2024 and substantially reduced marketing and promotional spend for INPEFA in 2025.

In addition, we also reduced our total debt by approximately $46.3 million in 2025, primarily using the proceeds from the Novo Nordisk upfront payment. Moving ahead to 2026, we expect total operating expenses to be between $100 million and $110 million. R&D expenses are expected to be between $63 million and $68 million and do not include costs associated with Phase III pivotal studies of pilavapadin as our goal would be to move this asset forward with a development partner. SG&A expenses, which include sales and marketing expenses, are expected to range between $37 million and $42 million. I will now turn it back to Mike for closing remarks.

Yes. Thanks, Scott. Now before we turn to Q&A, I just want to say again how excited we are about the year ahead in 2026. Last year was a year of progress and 2026 is a year of potential and possibility with several pivotal milestones ahead. Across our 3 core programs, we have multiple upcoming catalysts that we believe can drive substantial value creation from pilavapadin's partnership opportunities in neuropathic pain to sotagliflozin's multiple shots on goal across HCM, heart failure and type 1 diabetes to LX9851's near-term milestone potential in obesity, we're really firing on all cylinders this year.

Each of these programs addresses serious unmet medical needs and each has the potential to be transformative for patients who desperately need new treatment options. We have the pipeline. We have the team, and we have the momentum, and I'm incredibly excited about what lies ahead. So thanks, and I'll hand it over to the operator, and Craig, Scott and I will take your questions.

[Operator Instructions] Our first question will come from the line of Andrew Tsai with Jefferies.

This is Matt dialing in for Andrew Tsai. Congrats on the progress this quarter. Just a couple of questions for me. How much patient worth of data does open-label [ IST ] STENO1 study have on DKA safety right now for you to be able to guide to a potential approval in 2026? And then what are the exact time lines from submission to approval that you're expecting? Is this going to be a Class I or Class II resubmission here?

Yes. Thanks, Matt. I'll let Craig talk about the data. So we're expecting a 6-month review here. So reemphasizing that the data that we're seeing, we expect a submission this year and as well an approval before the end of 2026. Craig, do you want to talk about the data that we're seeing?

Yes. So again, Matt, I need to be a bit careful because this is in our trial. It's an investigator-initiated study. But as a reminder, this is a large trial. It's 2,000 patients total, 1,000 patients which are on -- is considered the standard of care and then another 1,000, which are randomized based on baseline characteristics to enhanced care, which would include sotagliflozin in a significant percentage of patients, but also the possibility of being on semaglutide and/or Kerendia depending upon baseline patient demographics.

The study has enrolled the majority of the patients. And again, I don't want to overstep Dr. Rossing and the STENO group, but enrollment has proceeded briskly. I think you can see some of their updates on ClinTrials.gov. And the enrollment, as we laid out with the FDA is proceeding to plan. We pre-agreed with FDA on 2 important criteria for resubmission. The first would be the total exposure required.

The second would be a rate of DKA. I can be a bit more expressive about the second criteria because the FDA put that in their end-of-review letter that they were really looking for a rate of diabetic ketoacidosis at or below that achieved with the 400-milligram dose arm in the inTandem program, which in the FDA's parlance was a number needed to harm of about 26, which corresponds to a rate of about 1 case -- I'm sorry, 3.5 cases per 100 patient years. I can tell you that currently, we are tracking in a way both in terms of total exposure and DKA rates that give us a high degree of confidence in where we stand in terms of our submission and approval time lines that both Mike and I highlighted during the call.

Our next question comes from the line of Yigal Nochomovitz with Citigroup.

Okay. I've got a question on the partnerships for the pain program. So you had the end of Phase II meeting. Could you just talk about how much that -- the results from that meeting have accelerated the partnering discussions since then? And is there a clearer line of sight to transacting something this year?

Yes. Thanks, Yigal. So I wouldn't say that they accelerated because we're in constant dialogue with a number of partners that we have been communicating with, but it allowed the conversations to be a little more specific and obviously provide some confidence around the program being able to move into Phase III and take away that sort of regulatory risk, if you like, which has been incredibly well received by partners. So we continue to sort of talk details with them and look forward to providing some more updates in the very near future.

Okay. And also, how much more can you say about what Novo plans to do with 9851 in terms of how it's going to be inserted into the development program, meaning in combo with the GLP-1 or for those perhaps not responding well enough or perhaps even as a maintenance therapy following the course of GLP-1 therapy? What can you say there? Or is that really Novo's call now?

Yes. I don't necessarily want to speak on Novo, but I think I've sort of hypothesized where I think that LX9851 would fit into the treatment paradigm and certainly was some of the background for their enthusiasm. But before I do that, Yigal, let me just reinforce how impressed we've been with the Novo team. And I think we all recognize that perhaps they're sort of losing the battle in injectables and have really pivoted strongly towards oral formulations as being the future and their future in obesity management.

And really, we've had that hypothesis all along that the future of obesity treatment will be in oral combinations of different MOAs, just like it is in most of cardiometabolic disease, whether it be hypertension, hyperlipidemia, et cetera, because it allows you to get synergies by combining different MOAs and orals obviously facilitate that ability to drive combinations. I think they're being very open, and they, therefore, are really doing an incredible amount of work on this program to see whether it's going to be as a stand-alone monotherapy to see whether it's in combination, to see whether it's right at the initiation of treatment, whether it becomes a maintenance therapy.

I think all of those options are on the table for them, and they're really driving very, very hard, which gives us confidence, as we mentioned in the opening remarks around the potential of receiving those 2 further milestones this year, which would really be an accelerated Phase I development. And we're excited about the possibility of clearing that hurdle and then really getting into Phase II and beyond, which would be very material for the company. Craig, do you have any additional thoughts or...

I'll just add from the scientific standpoint, the mechanism is complementary to semaglutide as we've communicated, and I think it's nicely summarized in the Journal of Endocrine Society paper that just came out this week, as we mentioned during the prepared remarks, this mechanism is thought to be really the only agent that is in development acting on what's called the allele break, which is a very different neuroendocrine signal of satiety that we've seen and we've communicated, I think, at prior meetings could act additively both to the amylin mechanism and certainly to the GLP or semaglutide mechanism.

So I think that's really how Novo is thinking about this is that this agent could be acting either alone or in combination with semaglutide or potentially in an additional combination with both an amylin analog and semaglutide analog. But again, we don't want to speak for Novo, our partner.

Our next question is going to come from the line of Joe Pantginis with H.C. Wainwright.

So Mike, I know the intent for pilavapadin is moving forward with an expected partner. But I want to ask the question this way. So based on your -- the larger coffers that you have now and how things are rapidly progressing with the data and your FDA discussions, are you looking towards any sort of flexibility or optionality with regard to even starting the study on your own prior to getting a partner?

Yes. It's a great question, Joe, and it's a great position to be in when you've got a number of opportunities ahead of you. And we're really very much focused on our near-term cardiometabolic opportunities. I think what we see in the opportunity with T1D for SOTA as well as HCM are both incredibly large commercial opportunities for us. And so we're very much focused on driving that forward. We have been continuing to do some work in preparation of what the Phase III program would look like for pilavapadin.

And in fact, that's been a part of the partnering discussions as well as we continue to sort of engage in a very granular time frame of what would be expected moving forward. And even that is changing as we speak. As you know, the recent announcement by Dr. [ Makary ] for one trial possibility is something that is coming into our thought process as well. And we need to consider that as a possibility for pilavapadin as we will be for all programs. So we are doing work in parallel, but we're not going to invest the financial commitment to commencing a Phase III trial for pilavapadin because we really want to invest that cash for both T1D and HCM at the moment. Craig, have you got anything else?

Yes. I think, Mike, you summarized the strategic part really well. I just wanted to reinforce the importance of the patient groups in the legislative dimension as well. And what we've seen in this regard is a tremendous interest from the patient community and really trying to bring that into a legislative position as well. As you know, Joe, a lot has been done in the acute pain setting, particularly in light of the opioid situation.

Patients who are on chronic pain treatment like DPNP are at much higher risk of actually developing opioid addiction. So there's been a really strong interest across the board in the pain community, both on the opioid avoidance side as well as the diabetes community in terms of really trying to put momentum behind this effort from a legislative front.

So we're really trying to approach this from multiple different ways, a regulatory legislative patient access standpoint as well as, as Mike said, we've really now finalized what the development program would be under standard conditions based on the end of Phase II meeting. So we continue to really look at all of these areas as the discussions continue because we don't want to just have the assets sitting there.

Yes. No, exactly. So I think Craig summarized that well. There's a bunch of activity that we're doing to continue the preparation for the program in parallel with the discussions. But our investment of capital is squarely focused at this time on Zynquista and HCM because we see those opportunities coming at us very, very fast.

That's very helpful. And maybe a question for Craig here. When you look at the SOTA profile for HCM, just curious how you believe the CARDIA and CROSS studies on the periphery could potentially impact future sNDAs and/or the marketing potential as you look at the broadening profile for SOTA and HCM.

Yes. Thanks for the question, Joe. We try to approach this in a way that really is -- the sum of the total is far greater than each of the individual parts. And we've really tried to take a pragmatic design approach to SONATA-HCM that would be clear, efficient and rapid that would spare capital in terms of doing a study that would achieve the goals of the FDA and other health authorities, but not add dramatically to the cost or slow enrollment.

And in that regard, we're really looking at SOTA-CROSS, SOTA-CARDIA and a number of other trials that we've been discussing investigator-initiated trials, looking at various imaging, functional patient feel outcomes that would complement the primary endpoint of SONATA-HCM. And we hope that the sum total of all of that will provide more mechanistic understanding of how the SGLT class will complement that of the CMIs and also going to be the first and only in HCM, but also to differentiate the dual mechanism of SOTA and the SGLT1 effects from the SGLT2 inhibitors, which are not being studied and have no data in HCM.

Yes. No. And just allow me to throw a little more color on to that, Joe, because it's a very important element of our portfolio, and we think it's a great opportunity not only for SOTA in patients with HCM, but for Lexicon. So as we noted, we did raise close to $100 million earlier this year. And we're spending a small portion of that this year at the moment as -- sorry, Scott gave in his guidance for the year.

But one of the important elements that we are going to undertake is to have a small field medical team to really bring about what is a ton of evidence now showing the reason to believe of SGLT1 as being a new class of medicine and being -- and having a lot of evidence that indicates it will be a very significant medicine for both obstructive and nonobstructive HCM.

So we're going to employ that field force as we march towards the data in Q1 2027 to not only talk about SONATA, not only talk about SOTA-CROSS and SOTA-P-CARDIA, which are very important elements, but a lot of the mechanistic evidence, one of which we presented today. And I think as we sort of educate the physician community beyond top KOLs, they will really see why SOTA has significant potential in HCM. So it's really an important focus for the company over the next 12 months.

Our next question comes from the line of Yasmeen Rahimi with Piper Sandler.

This is Shannon on for Yas Rahimi. Congrats on the progress. Could you just help us understand your visibility and confidence for getting the additional 50% enrollment for SONATA by mid-2026? And then also, is there -- the cadence of that enrollment, is that the same in both cohorts for nHCM and oHCM?

Yes. Great question. So I'll let Craig have first go at that one.

Yes, Shannon, it's a great question. We have a really nice window right now of enrollment that there are not a lot of competing global trials right now. We have, as I mentioned during the prepared remarks, all 130 sites now open across 20-plus countries. And we're at that, what I would call, steep part of the S-shape enrollment curve. We've sort of gotten over the early parts. We've had a few protocol amendments to make enrollment clarify things where there were open issues and enrollment has really ticked up consistent or ahead of our projections at this point.

And as Mike mentioned, we've crossed the 50% enrollment target much earlier in this quarter, and we see continued uptake in enrollment across all of the regions, the U.S., Europe, and Latin America are all contributing. Your second part of your question regarding enrollment is we have enrolled significant numbers of patients with both obstructive and nonobstructive HCM. What we are seeing, not surprisingly, is that there are some patients, particularly these large academic centers that are being treated currently with the CMIs for obstructive.

So we're seeing even more patient inflow for the nonobstructive cohort than the obstructive cohort. But we believe that we have enough patients in both cohorts to achieve what we set out in the trial. And as we mentioned, the trial is stratified but not capped. So we did stratify the patients based on their baseline characteristics of either being obstructive or nonobstructive, but we have not set a formal cap of a specific number of each group, and that we did discuss and align with FDA before we started the trial.

Yes. Shannon, it's a great point. As all those people know who've run clinical trials, enrollment is never linear in any clinical trial. And we have our target curve and our enrollment curve is right on that target curve, and we continue to enroll strongly such that we have a high degree of confidence that we'll hit that midyear target, which will have then a data readout in Q1 of '27.

Our next question comes from the line of Roanna Ruiz with Leerink Partners.

This is Michael on for Roanna Ruiz at Leerink Partners. I have a question about Phase III design of pilavapadin program. Previously, you mentioned several measures to mitigate the placebo response that you saw previously. Are you able to comment on what the enrollment criteria changes will look like for Phase III? Like for instance, will you require like minimum pain score threshold, things like that?

Yes. Great question, Michael. Thank you for that question. I think the changes that we're going to have, as we mentioned, probably the single largest change we're going to have is actually to expand enrollment that during the year, we did run a renal impairment study and we believe that having a renal impairment study completed with no impact on clearance with GFRs down to 30 significantly increases the enrollment potential for this study because there is a high degree of correlation between neuropathy and nephropathy, both in terms of the enhancement of patients, but also the severity of their neuropathic pain.

So as GFR drops, you tend to see a higher percentage of patients that have neuropathic pain, but also the more severe neuropathic pain. In terms of the other entry criteria, we're really looking at similar pain scores at baseline. I think the only change that we looked at, and we looked at a number of variables that might have affected the placebo rate. On the patient characteristics, the only one that we saw that was meaningful, and again, this is all retrospective looking back at the completed data was the duration of their neuropathy prior to enrollment.

So we might make some minor changes to the enrollment criteria in terms of the duration of their neuropathy of about a year. I believe in the Phase II study was 6 months, but to extend that to approximately 1 year. The other major elements that in talking to our advisers and to the FDA and in discussions with them, we are going to do more regarding the training of patients during the pain score because, again, reinforcing constantly how to use the visual analog scale for pain management, both with the sites and the patients is another element that we think that we can do to have more consistency across patient enrollment in the study sites.

And also, we now have a large number of study sites that have significant experience with us running these trials because we've now run 2 large trials, 2 large Phase II trials. So we think we have a good supply of sites to enroll these studies that will have experience with this drug, and we know have experience with doing DPNP studies.

And I'm showing no further questions at this time. And I would like to hand the conference back over to Mike Exton for closing remarks.

Yes. Thanks so much, operator, and thanks, guys, for your questions. Very much appreciated. Look, as I reflect on 2025, moving into 2026, the company has made a giant leap forward in my opinion. If you think about where we were last year, we needed to really summarize all of the Phase II data for pilavapadin. We needed to find a path forward for Zynquista. We needed to accelerate the enrollment of SOTA in HCM and fast forward to nearly at the end of the first quarter of 2026, and we now have clarity on pilavapadin and partnership.

Discussions are ongoing. We're on the precipice of a resubmission for Zynquista, and we're nearly closing the enrollment of HCM study, SONATA with a readout in '27. So we've got an amazing set of opportunities ahead of us and hopefully, you can see how pumped we are about all of those things coming our way in 2026 and beyond. So we feel very good. We're pushing very hard and look forward to giving you some more updates as the year progresses. So thanks very much, everyone.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.

Good afternoon, everyone. Welcome to the 44th Annual JPMorgan Healthcare Conference. My name is Alex Morrison. I'm an associate on JPM's health care team. Today, it's my pleasure to introduce Lexicon Pharmaceuticals. We'll have CEO, Mike Exton, speak; as well as Craig, Chief Medical Officer; and Scott, Chief Financial Officer, on stage for Q&A.

Great. So thanks so much, Alex, and thanks to JPMorgan for the invitation to present the Lexicon story. So for those of you who are unfamiliar with Lexicon -- let me go back. I'll be making some forward-looking statements. Please refer to the SEC filings for further details.

But Lexicon was founded 30 years ago with a bold ambitious plan at the time around before the human genome was described, before the mouse genome was even described to take 5,000 genes and create knockout mouse lines for all of those genes. Creating those mouse lines, then running them through a battery of tests to see what would be the impact of those genes. And as a result, they identified 200 genes of interest.

And fast forward through the Lexicon story. And we're pleased that over that time, we've had over 80 clinical trials looking at a number of new medicines and has resulted in the approval of 2 medicines in the United States. And -- and the approval and commercialization of INPEFA and taking new novel mechanisms into the clinic. We now have a medicine for non-opioid approach in neuropathic pain and a new non-incretin mechanism in obesity.

The Lexicon approach is to take oral medicines that we dose once daily across a number of different cardiometabolic and pain indications. And what we are trying to do is create a pipeline in a pill using oral medicines dosed once daily that really give a dosing opportunity both for combination therapies as well as having the possibility for monotherapies in areas that are very simple to dose against, and create medicines that have applicability across a number of different indications.

We've proven that with sotagliflozin, where we have indications and research going for heart failure, where we have an approved medicine for hypertrophic cardiomyopathy or HCM, and in type 1 diabetes for the control of glucose in T1D.

We've proven that again in neuropathic pain, where with pilavapadin, we have clinical data for neuropathic pain as well as a number of different other indications for the applicability of pilavapadin. Finally, LX9851, which is a new novel incretin for obesity and related conditions where we also see preclinical evidence in MASH and lipid control.

So we've landed on a focused company in 2 primary therapeutic areas: the first is cardiometabolic disease, and the second is pain. In cardiometabolic disease, we've really landed on a number of areas that are of hot interest to the clinical and investor community at the moment.

The first, INPEFA for heart failure is being commercialized in the U.S. We now have that same molecule in Phase III clinical trials for hypertrophic cardiomyopathy or HCM. And we're engaging the FDA in regulatory discussions around Zynquista for type 1 diabetes.

LX9851, a first-in-class non-incretin mechanism that's complementary to GLP-1s and other incretin-based assets is the first development candidate against ACSL5, and we're investigating that in obesity and related metabolic disorders.

On the other hand, in pain, it's an area of high unmet need where there's been very little developed over the last 2 decades, and we have pilavapadin, a first-in-class inhibitor of AAK1 which is a novel target, completely new target, and Lexicon is the leader of AAK1 biology. And this seems to be highly involved in the development of neuropathic pain. And we now have progressed the program to enter into Phase III clinical trials in 2026.

So last year, we pivoted to really focus on our R&D portfolio. We really set up a bold ambition of developing and progressing the pipeline to be able to really come into 2026 into a commercial-ready company. In HCM, we've initiated all the sites for the Phase III clinical trial, and we've accelerated the enrollment. For T1D, we have aligned with the FDA about resubmitting for type 1 diabetes and sotagliflozin with third-party investigator data, the STENO1 data. And that data and that process continues.

For pilavapadin, we concluded the PROGRESS trial, the Phase IIb trial and completed analyses across the Phase II program such that we recently held the end of Phase II meeting and are continuing to engage potential partners to progress that into Phase III. And finally, for LX9851, we secured a worldwide exclusive license with Novo Nordisk. We're incredibly pleased with that arrangement, and we completed all the IND-enabling work towards the end of last year.

All of this is built on operational excellence, where we've really taken very tight control of our spend. We have an INPEFA virtual sales force to be able to make INPEFA continually available to patients with heart failure. We've had the first ex-U.S. approval of INPEFA via our relationship with Viatris and submissions are ongoing outside of the U.S. and outside of Europe.

So in 2026, we've set up with a very clear goal of what we need to achieve. We need to partner pilavapadin and progress that into Phase III trials. We need to complete the enrollment of the SONATA Phase III trial for HCM. We're evaluating the regulatory pathway for Zynquista with a potential resubmission and approval in 2026. We're supporting the international expansion of sota by Viatris and really maintaining our discipline to support long-term growth.

Let me take a deep dive into our cardiometabolic platform. Really, HCM has become a topic of huge investor and clinical interest as more agents come online, the 2 approved agents, CMIs for obstructive HCM. We have a plan and have an ongoing trial -- Phase III trial in HCM called the SONATA trial, where we're looking at both obstructive and non-obstructive HCM in the 1 trial. That's accelerating nicely. The enrollment is going very well, such that we will conclude the enrollment in the first half of this year with potential top line data in the first quarter of next year.

In type 1 diabetes, we're on track for a resubmission to the FDA for the treatment of glycemic control in type 1 diabetes as an adjunct to insulin. It's hard to believe that since the invention of insulin, there's been no adjunct to control blood glucose in type 1 diabetes. This could potentially be the first adjunct in that over a century of history.

Like I mentioned, hypertrophic cardiomyopathy has been an area of intense interest recently. There's about 1 million people living with HCM. And it's really a very debilitating disease. People have shortness of breath, fatigue, activities of daily living are highly impacted. And it has significant downstream consequences can lead to heart failure and stroke.

And of that 1 million people, about 50% have an outflow tract obstruction or obstructive HCM and about half have non-obstructive HCM with underlying disease pathogenesis of altered metabolism, cardiac energetics across both of those. And that's what sotagliflozin targets.

So sotagliflozin, because of SGLT1 and SGLT2 dual inhibition is the only drug that works inside and outside the heart in HCM. The SGLT1 is expressed on the myocardium and it's by the expression of SGLT1, which has been up until now pretty underappreciated that sotagliflozin has its impact on altering cardiac energetics in the heart. And thereby allows it to potentially be a first-line agent with no grams in obstructive and non-obstructive HCM.

As I mentioned, we continue our Phase III SONATA trial, but that is really complemented by 2 other investigator-initiated trials that give us significant read-through into the Phase III outcome. SOTA-P-CARDIA was presented at the American Heart Association meeting last November. And it looked at the mechanistic benefits of sotagliflozin in patients with true HFpEF with an ejection fraction above 50.

Importantly, SGLT2 inhibitors, which have been around for a while, have both shown no efficacy in this type of population. Clinically, these patients really present very similar to non-obstructive HCM. The data showed that both from a symptomology perspective as well as from a functional perspective, sotagliflozin significantly improved disease dynamics in this group of patients, which really gives us confidence that this has the potential to impact non-obstructive HCM.

SOTA-CROSS is a crossover study looking at sotagliflozin in non-obstructive HCM. It's a 12-week crossover study, and that is ongoing. Now finally, in addition to both heart failure and HCM, sotagliflozin is on the precipice of being potentially resubmitted and potential approval to the FDA in 2026.

When we issued the CRL in 2025 at the end of 2025, the FDA was very explicit that they were needing more prospective data to demonstrate that the risk of diabetic ketoacidosis with sotagliflozin was acceptable. They had already accepted that the efficacy of Zynquista supports an approval, and they needed new prospective data.

And it just so happened that an investigator study called STENO, probably the largest study in type 1 diabetes ever, 2,000 patients looking at cardiac outcomes over 5 years was acceptable to look within that enrollment of patients to look at the exposure to sotagliflozin and what the rate of DKA could potentially be.

That open-label ongoing study in our estimation would allow us to both file and potentially have an approval in type 1 diabetes this year. We've been really impressed with the ongoing support of the type 1 diabetes patient population who continue to support and advocate for the approval of this medicine.

So let me switch now to pain. It's been an area that is really starting to get significant attention across the scientific community. And we are focused very much on neuropathic pain, the form of chronic pain. And pilavapadin is being investigated for diabetic peripheral neuropathic pain, or DPNP, which is a huge unmet need.

Neuropathic pain is chronic pain that comes about from damage to the nerve. And the biggest cause of that is diabetes. There are about 9 million patients in the U.S. living with DPNP. And the treatment paradigm for this typically involves gabapentinoids. So pregabalin, Lyrica, which was brought to the market over 2 decades ago.

Patients are really dissatisfied with these treatment options. They're not well tolerated. They're not very effective. And so typically, patients cycle in and out of treatments over time and eventually drop out of treatment altogether. So it's a really high unmet need, but it's -- and there's been little innovation in this area in a long time.

Nevertheless, there's a huge desire politically to have new non-opioid medicines. The alternatives to PAIN Act and the recent submission of the Relief of Chronic Pain Act show that the government has -- or there's bipartisan support to ensure that there is access to new non-opioid medicines going forward.

Pilavapadin is an inhibitor of AAK1, which is involved in the mediation of endocytosis, essentially involved in modulating the receptor vesicle recycling, which modulates the neurotransmitter exposure in the synaptic cleft, thereby leading to downstream abrogation of pain signals in the dorsal horn of the spinal cord. And we've been the first company to really show very significantly placebo-adjusted improvements in pain score in DPNP across a number of studies in our Phase II program.

We've shown biological activity. We've demonstrated that the 10-milligram dose of pilavapadin reduces ADPS, the average daily pain score by 2 points, and it has an acceptable tolerability profile. So this really now supports advancement into Phase III trials, and it would potentially be the first non-opioid treatment for DPNP in 2 decades.

As I mentioned, there's significant political and advocacy interest in developing new medicines. The FDA has recently provided draft guidelines on how to develop new medicines for DPNP and other forms of neuropathic pain. And we continue to advocate for new medicines in this space.

So what's next? We've completed the end of Phase II meeting. We continue to refine our Phase III protocol to ensure that we manage variability in particular, placebo responses moving forward. And we're reengaging with partners as soon as we receive the minutes from that meeting in the very near future.

So finally, let me just wrap up with where the company is right now. We very pleased that we've been able to do 2 very significant deals in the recent past. Firstly, we've expanded the geographic reach of sotagliflozin by a deal with Viatris to promote sotagliflozin across indications outside of the U.S. and outside of Europe. They've submitted in Saudi, Canada, Australia, New Zealand, Mexico and Malaysia. And in fact, had their first launch in the UAE on Monday.

And secondarily, we licensed LX9851, a novel non-incretin oral medicine to Novo Nordisk. And we recently triggered a $10 million milestone payment, are on track to receive another $20 million payment this year as we move -- as they move that into the clinic. That's incredibly exciting option as we now have oral semaglutide, and they are really focusing on how do they bring other non -- other oral medicines either a stand-alone or combination.

At the end of last year, we ended with about $125 million in cash and cash equivalents, which supports our operations into 2027. And as I mentioned, the milestones from Novo are excluded in that forecast.

So what does 2026 bring for us? Well, we're going to advance our late-stage pipeline in SONATA-HCM and for Zynquista in type 1 diabetes. We'll continue to support our partnerships with Novo and with Viatris, and continue our discipline in managing cash so that we really allocate capital in a way that benefits the long-term value of the company.

So with that, I thank you very much for your attention and look forward to questions.

Thanks, Mike. Maybe starting with the cardiometabolic side. What gives you confidence in the potential utility in HCM and where everything would fit in the current treatment paradigm?

Yes. Thanks, Alex. So we have a number of pieces of evidence that both in our own clinical trials and in investigator-initiated trials that have read-through into the ability of sota to be a significant factor in helping non-obstructive HCM in particular. So we're confident that, that gives us good grounds to believe that SONATA will be positive.

Further to that, we're very pleased to ensure and look that we will have a place in the treatment paradigm that is likely earlier on in the management of HCM than what you're seeing with those medicines that have a complex REMS or complex logistics in getting them initiated.

So that gives us a feeling that if SONATA is positive, we have the potential to have a broad patient population that could be applicable for sotagliflozin and not just be restricted to certain high throughput centers.

Yes, I'll add a little bit more context. Thanks, Mike. It's Craig Granowitz, I'm the Chief Medical Officer at Lexicon. The important thing to think about with sotagliflozin, as Mike mentioned during his prepared remarks, it's the only agent that acts both on the heart directly and indirectly. So you're getting all of the SGLT2 effects on the renal and the SGLT1 effects on renal function, reducing preload and afterload and overall heart failure benefits, symptomatic relief reduction, particularly improvement in KCCQ score and 6-minute walk.

The unique attributes of sotagliflozin is the only dual inhibitor of SGLT1 and 2 is that you're getting direct effects on the myocardium. As Mike mentioned in his prepared remarks, the issue with HCM is you have both a hyperdynamic contractility, which is where the CMIs are acting, but you also have a metabolic disorder in the myocardium that's probably both mitochondrial-driven and ex mitochondrial driven.

And as Mike mentioned, we've demonstrated with significant both clinical tissue explants and animal model data that sota is acting to improve the energetics and much more efficient use of ATP and energy in the cells. And it's that long-term diastolic dysfunction that leads to cardiac fibrosis and ultimate heart failure with a stiff large left ventricle.

Great. Maybe as we're thinking about the market sizing between obstructive versus non-obstructive, where do you see that going and fitting in and especially with the recent regulatory time lines for OHCM?

Yes. So our best knowledge is currently, it's about a 50-50 split between obstructive and non-obstructive. Most of the obstructive patients have been diagnosed because it's very easy to see it on an echo. And what we're finding now is, in fact, the non-obstructive population is growing significantly faster, not because all of a sudden, there are more non-obstructive HCM patients, but in fact, it's the awareness is being raised by new medications and people are thereby discerning non-obstructive HCM patients from what may have previously just been diagnosed as a HFpEF patient.

So we think with SONATA, because we're having a single study across both obstructive and non-obstructive, there's an opportunity for us to be broadly applicable across the 2 categories of disease. They may be applied a little bit differently. The CMIs are clearly having an indication currently for obstructive HCM. They're quite effective at reducing that outflow tract obstruction. And so sota could be potentially used on top of the CMI for obstructive. For non-obstructive, we think that there really is the potential for broad use in that population because, as Craig mentioned, sota is really getting to the underlying pathology of the disease, the cardiac energetics.

On Zynquista, so needed advance for type 1, right, aiming to submit an NDA. What's been your recent dialogue with the FDA, kind of your time line of resubmission? And just what gives you confidence this time?

FDA only had a single question in the CRL is, can you bring to us prospective data that would give us confidence that in another data set, the rate of diabetic ketoacidosis would be acceptable. And so we need to define with FDA a few things. What was acceptable in their mind, and I think they've clarified that. They've also clarified how much exposure do you need? Because DKA, fortunately, is a pretty rare event so that you need a significant amount of patient exposure and experience in order to accumulate enough patient years of exposure to have a rate of diabetic ketoacidosis that you can have confidence in.

So the more data you have, the more confidence you have in that point estimate of the rate of DKA and that the confidence interval starts to shrink. So primarily, the discussion with the FDA around the STENO trial has been, first of all, that FDA has agreed that this trial is suitable to address their question. That was a critical milestone. The second is that we've agreed with FDA of what an acceptable rate of diabetic ketoacidosis would be. And the third is we've also gained alignment with FDA of roughly how much total patient exposure do we need in order to achieve that.

And those are really the parameters that we're working against as we accumulate that data to reach those thresholds that FDA and we have agreed, working very closely with this third-party group in Denmark called STENO, which has a 40-year history of running really world-class type 1 diabetes studies and includes nearly every type 1 center in the entire country of Denmark. And as Mike mentioned, STENO1 is probably the largest type 1 -- largest and longest type 1 study that's ever been conducted with 2,000 patients as a target enrollment.

Got you. Thanks. Maybe shifting to pain on DPNP, Phase II data from the potential. How would you describe the overall opportunity? And what are you hoping for ultimately in a partner?

The opportunity is massive for a couple of reasons. The size of the patient population is very large, as I mentioned, just in the U.S. alone, 9 million diagnosed patients, 9 million patients who have received some sort of treatment recently. But perhaps more importantly, the fact that there are just no good options. And as we mentioned, that patients cycle through the available options, which are the gabapentinoids, the dual reuptake inhibitors, mostly duloxetine as well as then the potential to move to opioids. And opioids clearly have significant efficacy in this space but come both with side effect and social issues that may not make them optimal.

So for that reason, having pilavapadin potentially be the first and only approved agent, I think there will be significant demand both from patients and physicians for that medicine as well as the tailwinds of legislative support, if you like, for ensuring that passes through payers and access in a smooth way.

Got it. And then on obesity, obviously exploding, everything is going on there. Partner program with Novo 9851, what's differentiating about that? And what do you think the bar will be ultimately for these next-gen therapies coming to market?

Yes. I think the question is going to be any drug that's acting on absorption is going to be GI tolerability and GI tolerability, both independently and on top of GLP-1 in the case of Novo with semaglutide. The benefits of this agent is currently a large majority of patients don't stay on these drugs for very long. And in fact, you see even in the media today, various media stars coming out and saying, I can't stay on my GLP-1. And when I go off my GLP-1, I regain 20 or 30 pounds.

So I think the long-term future of this category, if you listen to those at Lilly, Novo and other leading companies, is to switch to from an injectable market to an oral market and a market that you can either cycle therapies that you have nonoverlapping toxicities or that you have something that is better tolerated over the long run.

And last one for me, I would love to open it up to everyone else. But what are you most excited for in 2026 with Lexicon?

Just continuing to advance our pipeline, both with HCM, but perhaps most importantly, getting Zynquista over the line. And the demand there and the need from patients is extreme for a new option to help them manage their blood glucose. And so we're really excited for that. And of course, finally, then partnering pilavapadin and having that move into late-stage development to make it available for a patient group that really has a huge need.

Great. Thank you. Awesome. Well, thank you very much. Thanks, everyone, for coming.

Thanks so much.

Thank you.

Thank you, everyone, for tuning in. I'm Andrew Tsai, Senior biotech analyst at Jefferies, and it's my pleasure to have the Lexicon team with me today. Sitting to the direct right of me is Craig Granowitz, CMO; and to his right is Mike Exton, CEO. Welcome, both of you.

So maybe to start, give us a brief overview of Lexicon, what you're trying to achieve, what you're working on, catalyst flow over the next 6 to 12 months could be helpful.

Yes. No, fantastic. So delighted to be here. It's been a wonderful meeting so far. And in fact, an incredible 2025 really for Lexicon up until this point. So we've had a number of very significant advances of the pipeline over the last 11 months. And let me just outline briefly where we're at across those developments.

So first of all, for pilavapadin, our novel AAK1 inhibitor for neuropathic pain, we read out our Phase IIb trial, the PROGRESS trial this year. And over the last 6 months, we've analyzed the totality of evidence from that Phase II program and have submitted an end of Phase II meeting request to the FDA and submitted our briefing book.

That meeting will take place this year. And so we're looking forward to engaging with them to understand their expectations around the Phase III program and so being in a position to advance that into pivotal trials next year. At the same time, we're engaging with potential partners on looking how we partner that asset and move that not only into pivotal trials, but forward into commercial products. that's gone incredibly well.

Secondarily, for sotagliflozin, we are now accelerating the enrollment in the SONATA trial. This is a trial for non-obstructive and obstructive HCM, hypertrophic cardiomyopathy. It's enrolling incredibly well. We've now got all sites worldwide open. And so with that, the patient recruitment is really steadily increasing. And we expect to close the enrollment of that certainly in H1 of 2026, if not by Q1, if we continue to really perform very well there.

This is an incredible area where if we have data at the end of 2026, we could potentially be the first medicine that has positive data in nonobstructive HCM. As you know, there's current medicines that have had positive data in obstructive HCM, which is an important component, but a huge unmet need in nonobstructive HCM. So that's a great opportunity for us.

And we have recently, with sotagliflozin, the same asset; reengaged with the FDA around type 1 diabetes, as you're well aware, Andrew. And we've had incredibly constructive engagement with the FDA ever since our end of review meeting in May of this year.

And we now have submitted to them a third-party investigator-initiated study, the protocol, the design and in fact, some data from this open-label study that will support a potential resubmission for Zynquista. It's really what the FDA has requested from us now for the last couple of years.

As new prospective data in somewhat unique position, the FDA has accepted this data or accepted this trial, which is an IIS from Denmark as potentially being supportive of a resubmission. So that's fantastic for folks with type 1 diabetes who've really been an incredible advocate for having this medicine approved.

And then finally, we, earlier this year, had a worldwide license, exclusive license with Novo Nordisk for our novel obesity agent, LX9851, that targets another novel target discovered by the Genome5000 platform.

It was on us to complete the IND studies, IND-enabling studies for that asset. They're all now done. And so we've handed over the full data package to Novo Nordisk, who really have demonstrated their enthusiasm and desire to push this program forward at pace.

And so we're now waiting on them to submit the -- prepare and submit the IND, and that will enable some early milestone payments of up to $30 million, and we look seeing how that asset progresses in the clinic.

So really a heap going on for us, a number of catalysts across the cardiometabolic space, the neuropathic pain space and obviously, with obesity as well.

Great. So 3 late-stage programs plus a very differentiated obesity program on top of that. Okay. So maybe we can talk about type 1 diabetes. You alluded to how the FDA seems to be collaborative. But can you give us a brief history of what's happened since the initial CRL that you received? What exactly was the FDA bothered by? And how have you addressed it in a sense you alluded to earlier?

Yes. Thank you, Andrew. And the FDA letter has now been made public by the FDA of our CRL. And I think we've shared publicly what the three key elements were.

The first is that FDA recognizes the unmet need and the patient request and demand for a non-insulin-based therapy to improve glycemic control in type 1 diabetes because only 20% of patients get to goal.

The second is that they realize that they need to be more collaborative with us and expressed a real willingness. And honestly, those words have been matched by their deeds to be very open and quite constructive in their dialogue with us.

And the third is their openness of using nontraditional company-sponsored sort of Phase III-type trial, which was really the significant issue we've had with the FDA throughout is how do you document it with prospective data, the rate of diabetic ketoacidosis, which by its very definition is a rare event. So how in a group of patients, which is relatively rare with type 1 diabetes, do you run a study in a reasonable period of time with a reasonable cost with a clear outcome to meet the FDA's request?

So I think by FDA's willingness to accept, and as Mike mentioned, and I think we publicly stated this is the STENO trial, which again is publicly listed on clinical trials; it's a 2,000-patient trial being run by the STENO group and funded through the Novo Foundation, who is their funding source. So Lexicon is not paying for this trial.

The trial was already running, so that saved a significant amount of time. So we've reduced our cost to essentially just free drug. The timeline significantly [ reduced ] because the trial was already running. And then to really discuss with FDA, the trial design, the way that they are collecting data, the way that they're collecting DKA events; those seem to be acceptable to the agency.

So right now, we're really working through the agency of exactly what criteria they want to see in order to satisfy their concern about benefit risk on DKA rates and then the amount of data and exposure data that will be required to meet their test and then will the data actually support the contention that the rates of diabetic ketoacidosis are at or below those that were seen in the [ tandem ] program.

I see. And can you give us a framework of how big of a market opportunity this is peak sales-wise, if you were to get this approved?

Yes. So this is a pretty sizable market opportunity. There's 1.7 million type 1 diabetics in the U.S. As Craig said, only 20% of them get to goal. So really, there's a huge need for further glycemic control, which they haven't had for over a century. It's hard to believe actually that that's the case.

And the important piece for us is that type 1 diabetes offers a different commercial opportunity to what we saw with INPEFA and heart failure. And the reason for that is this will be the first and only in its class approved for this particular indication. That affords you a completely different access situation, it affords you the potential to price it very differently to what saw with INPEFA.

And clearly, we are very connected with the patient community, with the physician community through our work with type 1 diabetes, through our work with [ phlobaphene ] in diabetic neuropathy. And so we believe that this is a very significant commercial opportunity for Lexicon.

I think, Andrew, the other part, again, we, in a sense, already have a prepaid life cycle management program as well. And I think that's important to remember because in many cases, it's a significant additional expense on the P&L to run a significant LCM.

But you have the STENO trial running, which is looking at reducing rates of MACE in an enhanced treatment regimen that includes sotagliflozin and/or semaglutide and/or Finerenone. I think that will be very helpful.

There's a trial that's running a double-blind placebo-controlled study in with type 1 diabetes and symptomatic heart failure. So that trial is also running in accruing patients and again, is being paid for by third parties.

And then there's another trial that's running as well type 1 patients with chronic kidney disease and looking at modification of disease progression in that group. So all of that is already ongoing and prepaid.

And then there's also another whole set of studies that are being supported by the NIH that are all using sotagliflozin to look at the mechanism of diabetic ketoacidosis and acidosis in general. So all of that work is already paid for and going.

I see. And specifically, the STENO, because it's open label, you're able to provide the data, DKA rates, whatever the FDA needs in real-time?

That's right. Andrew, that's a really critical sort of in-the-weeds point. But the fact that it is an open-label trial, we [ can't ] provide with collaboration with STENO because it's their trial of that data to the agency.

Understood. So meeting with the FDA in Q4, fair to assume we hear back the Street in early 2026, maybe you wait for the meeting minutes. Is that fair? Or could we expect an update actually in Q4?

Look, I think it will be around about that time. We expect to have clarity around the end of this year. And so we'll be either engaging with the Street end of this year or in '26. And importantly, that would give us the possibility, we believe, to have a potential resubmission early in 2026 as well. So yes, that's a very near-term opportunity for us.

And if the FDA says "No, not at this time, we're not yet convinced," do you just stay on the sidelines, wait for these other trials to accumulate more data then go back to the FDA? Or would you consider running a separate trial, for instance?

I think here with the FDA, we are both very aligned on this time around working together in a way where we believe this is an approvable drug. And so I'm not really anticipating. Of course, we don't know how the data will show out. We know what the data is looking like right now. Of course, we will see as time progresses.

But I think both the FDA and for Lexicon, we're fully aligned that this is an opportunity that we need to provide folks with type 1 diabetes.

Yes. The two major technical variables are the enrollment in the trial and exposure and then the rates of DKA that are actually demonstrated in the trial. So I think those are really the two main variables.

Right, right. So if this is approved, you mentioned that you could price this differently to INPEFA, which is underlying the same drug. Any kind of color on the pricing differential...

It's probably a little premature, Andrew. It's a nice question, but probably a little bit early to comment on that. We've actually conducted some research at the end of last year when we were looking to potentially have an approval. We will sort of double-click on that and confirm our assumptions, and we'll probably be able to comment further early next year.

Sure. And then maybe last question because sotagliflozin has been in the clinic for quite some time. Remind us the patent [ estate ] of Zynquista?

Yes. So we have until 2033.

Okay. Very good. And so moving on to HCM. It sounds like data could be second half 2026. Is that the case? Phase III data?

Again, trial will be enrolled in the first half, then you got to treat the patients for 6 months and roll the data up. So I think the number that we're currently publicly communicated is first -- data, first quarter '27.

Okay. We're pushing hard to enroll as quickly as possible. So yes, look, this is an area of high unmet need for the patient and obviously, great opportunity. So we expect data certainly by Q1 of 2027 and pushing hard to accelerate as much as we can.

And my understanding is the primary endpoint is based on the KCCQ symptom score. And so what kind of data would you -- efficacy would you want to see across both obstructive and nonobstructive? What do you deem as successful?

Well, from a regulatory standpoint, I think it's the same thing that is seen as clinically meaningful is anything greater than a placebo-adjusted improvement of 4 to 5 points is seen as sort of a benchmark. And I think that's what others in this space have really looked for.

I would say that if you look at the recent data that was presented on HFpEF in a placebo-controlled trial in a study called [ SOTA CARDIA ] at AHA, there was a double-digit difference in KCCQ. And I think there are many that look at HFpEF as a read-through at least for nonobstructive HCM.

So those are the numbers that unlike any of the other drugs that are being looked at in HCM, we have a long track record with, again, over 12,000 patients in heart failure. So I think we've got a good understanding of the symptomatic relief. And HCM is just really a subset of HFpEF.

Understood. And would you expect efficacy to look different between nonobstructive and obstructive?

Well, I think if you talk to a lot of the KOLs, and again, all this is speculation; it's unlikely that SOTA is going to have a dramatic effect on reducing a significant outflow of tract obstruction. So I think that there are some that say, "Gee, maybe you'll get a larger reduction." If you have a very large outflow tract obstruction and a large gradient, that nonobstructive could give you a greater improvement than not.

But remember, we are allowing patients to be on a CMI as well. As long as the patients have a KCCQ score of below 80, that's the inclusion criteria. So I think this is going to be really the first data set that's going to have patients on CMIs.

And also the interesting group of patients who did have an obstruction or on a CMI and are now nonobstructive, but are still symptomatic, so I think that's going to be a really interesting group. We don't know how many people that will be.

But I think you're going to have every flavor of patient type. And I think that's going to be very important data for providers because this will be the first data set that's been done in a high-quality placebo-controlled trial on top of CMI.

I see. And let's just say this was approved, would this drug be positioned to be used ahead of [ CMIs ] or afterwards in your view?

Yes. Look, I think there's a couple of factors that really suggest this could be used first line. The first is that this is a very simple medicine to take. It's a once-a-day oral medicine that has a very well-known safety profile.

And if the efficacy certainly in nonobstructive turns out anything like we've seen in HFpEF, it will be a very, very compelling proposition to use first line, especially because the MAPLE data was read out by Cytokinetics showed that beta blockers at best do nothing and likely are not very helpful in obstructive HCM. So it's really causing physicians to rethink the treatment paradigm. And SOTA has a great potential to be used as a first-line agent because of that.

But that notwithstanding, of course, one of the issues that CMIs will always have, independent of whether it's [ maAR or AfI ], is the logistics and the burden that's put in place to initiate and maintain a patient on a CMI. And so that automatically gravitates towards a later treatment course if a patient is initiated on something and is still symptomatic.

So we think there's a great opportunity for SOTA to take a first-line in both obstructive and nonobstructive HCM.

And in the meantime, there is this third-party ISC SOTA-CROSS that has data in mid-2026 in nonobstructive HCM. Can you remind us the trial design, how long it is? How many patients? How much read-through could there be from that study to your own study?

Yes. So again, this is an NIH-sponsored trial being run at the University of Pennsylvania by the same investigator happens to be one of our co-PIs, Dr. Sharlene Day. It's -- in terms of patient numbers, it is relatively small. But the power of the trial is extremely high because it is a crossover design, hence the name SOTA-CROSS. And we really are looking at this as the totality of the data. So I think SOTA-CROSS is going to provide many of those other metrics that will complement what we're doing in SONATA.

So what we tried to do in SONATA is to have the most streamlined, most efficient, easiest-to-enroll trial for a registrational study and then to complement not only with the SOTA-CROSS data, but the SOTA-P-CARDIA data, again, also provides complementary data.

So when you look at that, you're going to have genomics, you're going to have proteomics, you're going to have a lot of MRI-based metrics. You're going to have additional physiologic metrics out of SOTA-CROSS and SOTA-P-CARDIA that will then complement the primary endpoint of the KCCQ in, again, high-quality studies that are run across the board.

In the very unusual circumstance where SOTA-CROSS shows a mixed signal, is there any way for you to make adjustments to your own SONATA trial?

My guess is by then to what Mike was saying before, the trial be fully enrolled. Again, there's always an opportunity before you close the database that you can change your SAP, but we haven't really thought through that.

Understood. And FDA, however, has given you the [ GreenLIGHT-1 ] study as enough for FDA approval?

Just like all the other companies. And I think you even saw that with the later studies that are done with the CMIs in the nonobstructive that FDA was satisfied with a single trial with the KCCQ primary endpoint.

Okay. So INPEFA, Zynquista and now this HCM, all rooted on sotagliflozin, are you filing sNDAs for type 1 diabetes in theory and HCM? Or are there unique NDAs to -- maybe that helps with pricing differential?

Zynquista is an NDA that was started before we even did the heart failure program. It goes back a long, long way. I think really the opportunity set with INPEFA for HCM, it would probably be an sNDA.

Okay. And do you have the intention, let's just say, everything worked out, to market this yourselves in the U.S.?

Yes, two different opportunities. I think for Zynquista, we're going to explore everything for the commercialization of Zynquista. We're certainly prepared to take an access first type of commercialization approach. And that then really lends itself to a somewhat sort of flexible model, somewhat virtual or certainly hybrid model and which we're now getting great experience with our INPEFA sales actually, which is promoted fully virtually.

And then in addition to that, there's the potential opportunity for co-promotes with companies who are deep in the diabetes and specifically type 1 diabetes space. So we're going to explore all of those.

For HCM, certainly in the U.S., I see that very much as a Lexicon opportunity that we would commercialize ourselves. We understand the space very well, and we would gear up to drive the commercialization of that ourselves.

Speaking of commercialization, Mike, maybe I'll just spend a moment since Viatris was on the agenda today here at your meeting. And I think it was notable that, that was mentioned repeatedly during their presentation. I think they've been very satisfied. I know we've been very satisfied with them as a partner.

They've already filed and gained approval and reimbursement approval in the United Arab Emirates and have filed and/or will be filing in 6 additional countries this year. And that's within 1 year of signing the deal with them. And they've additionally filed in Canada, Australia and New Zealand, in addition to the UAE, Saudi. And they have plans to file before the end of the year in a couple of other markets as well.

Understood. And then last couple of minutes, shifting to pilavapadin, a novel AAK1 inhibitor. You mentioned you'll start Phase III studies hopefully in 2026. Maybe talk about the big picture macro landscape around chronic pain, how that's changed? What's the FDA's view on that compared to before? Is it looks seeming more favorable basically?

I think, Andrew, the market has really developed in a very favorable way, even from a policy standpoint. So I think there have been two important things outside of Lexicon that have taken place. The first is FDA actually issued a few months ago a draft guidance for running studies in chronic neuropathic pain, which was very much in alignment with our expectations and our dialogue with them. So I think FDA recognizes the fact that they put all the effort of putting a draft guidance out and are currently seeking external feedback on that.

The other is that there's just legislation that would cover Medicare coverage of chronic pain that's been submitted in the Senate. And we believe that there also is a strong push to submit that into the House to have two separate bills, and that would dramatically expand the mandatory coverage similar to what was done with the NOPAIN Act in terms of acute pain.

So in addition to all the work that we're doing, I think there are significant policy support for this, both from the FDA and from the U.S. House and Senate in terms of the need for non-opioids options.

I see. So the macro is definitely on your side right now. And so you're talking to the FDA about the Phase III in Q4? And when should we hear about an outcome?

I think that would be early in 2026. So -- once we have the meeting and 30 days later, we should have the minutes and then we can describe what we've heard.

And then maybe last question. Should you start Phase III studies in 2026, when could we expect data you think?

I think we haven't talked about that specifically, but for progress, the IIb study was a year's time to get that fully completed.

Yes. Maybe I'll just give a time frame of the size of the study. We're really looking at probably 2 parallel trials. And there are 2 arms, so just 2-arm trials and roughly 350 patients per arm. So you're looking at studies that are not particularly large. And to Mike's point, we believe could be enrolled in about a year, you're looking at a 12 weeks treatment follow-up. So within a couple of years, you could have data.

Great. I think that's all the time we have, but thank you so much.

Thanks so much.

Thank you, Andrew.

Welcome to the Lexicon Pharmaceuticals Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, November 6, 2025.

I will now turn the call over to Lisa DeFrancesco, Senior Vice President for Investor Relations and Corporate Communications for Lexicon. Please go ahead, Lisa.

Thank you, Mila. Good morning, and welcome to our third quarter 2025 conference call. Joining me today are Dr. Mike Exton, Lexicon's Chief Executive Officer and Director; Dr. Craig Granowitz, Senior Vice President and Chief Medical Officer; and Scott Coiante, Senior Vice President and Chief Financial Officer.

This morning, Lexicon issued a press release announcing our financial results for the third quarter of 2025, 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 also available on our website. During the call, we will also review the information provided in the press 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 the safety, efficacy, clinical development, regulatory status and therapeutic and commercial potential of pilavapadin, LX9851, sotagliflozin and our other drug programs as well as our business generally. These statements may include characterizations and projections relating to the clinical development, regulatory status and market opportunity for our drug programs and the commercial performance of INPEFA for heart failure.

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, and we refer you to our most recent annual report on Form 10-K and our other SEC filings for detailed information describing such risks.

I would now like to turn the call over to Mike Exton. Mike?

Okay. Great. Thank you, Lisa, and good day, everyone. Great to have you all with us this morning. We're really excited to give you updates on this quarter and all the great work that's going on here at Lexicon.

Now as we approach the final weeks of the year, I wanted to really begin by regrounding you on the ambitious set of strategic imperatives that we set out at the start of this year, which were designed to drive long-term value for the company. Now these goals were, firstly, to progress pilavapadin to be ready for Phase III registrational trials. Secondly, submit an IND for LX9851, our novel non-incretin candidate in obesity. Thirdly, to recruit patients and accelerate recruitment into our ongoing Phase III clinical trial in hypertrophic cardiomyopathy, or HCM, named SONATA; continue the ongoing discussions with FDA on Zynquista and establish a path forward in type 1 diabetes. And finally, to add targeted partnerships to maximize the value of our R&D programs.

Now throughout the past 3 quarters, we've made really excellent progress, not only against these goals, but within our pipeline and across our organization. In addition, we've continued to make strategic decisions to further advance our position across cardiometabolic disease with high unmet need. In so doing, we've successfully repositioned the company to really focus on R&D. We've achieved this focus by developing our innovative pipeline, maximizing operational efficiency and elevating the focus on targeted partnering.

So allow me to outline the substantial progress in R&D. For pilavapadin, we recently presented a post-hoc analysis of the aggregated results of our Phase II program in diabetic peripheral neuropathic pain or DPNP. All of our findings to date reinforce the broad clinical potential for this novel molecule as well as its Phase III readiness, and we're working with the FDA on next steps as well as engaging with potential partners.

For LX9851, I'm really pleased to say that we've completed our IND-enabling studies. And as you know, earlier this year, we entered into an exclusive agreement with a strong partner who have the capabilities to develop this asset as quickly and as broadly as possible.

And finally, for sotagliflozin, all 130-plus sites are now active in our Phase III SONATA study in HCM, which is the only Phase III HCM program enrolling both obstructive and non-obstructive subtypes.

Now operationally, we are very mindful of resource utilization here at Lexicon across all parts of the business. This has enabled us to significantly reduce our operating expenses while preserving investment in areas where we believe we have the highest probability of value creation.

Embedding an efficiency mindset has also resulted in us implementing innovative ways to drive our business forward. For example, as many of you are aware, a substantial proportion of the current evidence generation for SOTA is conducted and funded by third parties.

On the commercial side of our business, we've recently introduced an innovative virtual sales support system for INPEFA here in the U.S. as we look to move INPEFA from a stable breakeven business to a growing profitable revenue stream for Lexicon in 2026 and beyond.

Now before Craig takes us through specific updates on the pipeline, I'd like to take a few moments to talk about some other internal and external pillars that we believe will continue to positively shape our business moving forward.

First of all, as we continue to advance the science and explore the clinical potential of our assets, strategic and thoughtful partnering is vital to increasing the likelihood of our potential products reaching patients. Now we've demonstrated our ability to partner with strong organizations, and I'm really impressed not only by the capability and drive our partners are demonstrating, but how seamlessly and effectively our teams are really working together, and we can already see our strategy in action.

Firstly, we're working closely with Viatris on expanding the reach of SOTA for heart failure in major markets and territories outside of the U.S. and Europe, and they're making really excellent progress. Really, really happy with that partnership with Viatris.

Secondly, we aim to maximize the potential of LX9851 with our licensee Novo Nordisk, who, as you know, are a global expert in obesity and related conditions. And our recent completion of IND-enabling studies of LX9851 in obesity means that we may earn up to $30 million in near-term milestone payments as LX9851 enters future phases of development.

Lastly, partnership discussions are ongoing with pilavapadin, where we aim to collaborate with a high-quality partner to unlock the pipeline and appeal potential of this asset globally and across multiple indications. So our approach to partnership remains flexible as we aim to stay focused internally on our core cardiometabolic expertise.

Second, I'd like to turn your attention to Zynquista as our engagement with the FDA has progressed significantly. In September, we shared that we've submitted additional data to the FDA supporting the benefit risk profile of Zynquista as an adjunct to insulin for glycemic control in adults with type 1 diabetes. These data were from an ongoing third-party funded investigator-sponsored trials of Zynquista and were submitted as part of a Type D process to address the concerns the FDA had raised in its December 2024 complete response letter. Now we feel that these data support a positive benefit risk of Zynquista and address the concerns raised. And we're committed to working with the FDA on a path forward. In fact, the agency confirmed that they expect to provide written feedback by the end of this year. And following alignment with the FDA, Lexicon would target a resubmission as early as possible in 2026.

And finally, with health care on the political agenda in D.C. and beyond, we see positive shifts and opportunities in this environment for our portfolio. Now one area where this is particularly apparent is neuropathic pain management. Neuropathic pain is a type of chronic pain in which there's been little advancement in treatments for over 2 decades despite its significant impact on patients' quality of life. For those with chronic pain, many have prescribed oral opioids despite the known serious risks of misuse. Better, safer options are not only needed, but in fact, being demanded.

And there have been 3 major developments this quarter that I want to update you on. Firstly, as a part of our advocacy efforts this year, Lexicon convened the first ever chronic pain roundtable in D.C. with representatives across clinical, patient and payer communities. We're really inspired by this discussion with all of these experts, all of whom are actively advocating for recognition of chronic pain in legislation and the need for new innovation and access to non-opioid treatment options.

Second and most recently, just a few days ago, a new bill, the Relief of Chronic Pain Act was introduced into the U.S. Senate to increase access to non-opioid therapies for Medicare patients with chronic pain. And finally, the FDA recently issued new draft guidance to expand non-opioid options for chronic pain management. So these 3 factors, together with additional legislative efforts that are currently making their way through Congress really underscore the critical bipartisan demand for opioid alternatives in pain management.

So overall, we're encouraged to see that not only these signals from the broader legislative environment, but also other important catalysts for change. From regulatory openness, evolving access dynamics, AI exploration and overall changes in clinical care, all of these changes are huge opportunities for our company.

So with that, I'll turn it over to Craig to further update you on our assets under development. Over to you, Craig.

Thank you, Mike. As Mike mentioned, we have made significant progress across our pipeline this year. It has been a busy and productive 3 quarters. I'd like to begin with pilavapadin, our novel non-opioid AAK1 inhibitor. Data and analyses from 3 separate Phase II trials in neuropathic pain provide evidence of consistent and clinically meaningful pain reduction and validate the response and tolerability profiles of pilavapadin. While our lead indication in DPNP represents a mature clinical program, several secondary indications are also Phase II-ready, providing significant expansion opportunities.

In addition, the AAK pathway is central to a number of cellular processes such as synaptic signaling between neurons. With this in mind, we've also conducted IND-enabling work in multiple neuroscience indications, underscoring pilavapadin as a potential pipeline in a pill. We've accumulated data from more than 600 patients treated with pilavapadin and have demonstrated a well-understood and acceptable safety and tolerability profile.

Finally, patent protection on the pilavapadin molecule extends through 2040 when including an anticipated 5-year extension. This provides a long period of exclusivity to maximize the value of any investment related to this asset. For the past several weeks, we have presented data on pilavapadin in DPNP at a number of important medical meetings.

For context, earlier this year, we shared top line data from PROGRESS, our Phase IIb study of pilavapadin in patients with DPNP. The study met its objective of identifying 10 milligrams as the appropriate dose to advance into Phase III development. Since that time, we have completed additional post-hoc analyses and an additional renal impairment study to further clarify the product profile.

We set out to achieve a few objectives with these analyses. One, to investigate an exposure response relationship; second, to evaluate adherence across treatment arms; third, to validate the robustness of the 10-milligram dose; and finally, to confirm the safety and tolerability profile by evaluating pilavapadin’s pharmacokinetic profile in a broader patient population.

The post-hoc PROGRESS and RELIEF analysis that we presented in September and October successfully addressed these key objectives, leading us to a few important conclusions. There is a linear relationship between increased plasma levels of pilavapadin and reduction in pain score. The post-hoc analysis confirmed the biological activity of this drug.

Second, pilavapadin’s effects on pain is clinically meaningful. Notably, the 10-milligram dose achieved a 2-point drop in ADPS from baseline by week 12. Third, the 10-milligram dose demonstrates an acceptable tolerability profile with nearly the same percentage of patients completing the study on treatment arm as the placebo arm.

And lastly, we conducted additional human studies that have concluded there are no cardiac signals such as QTc prolongation. And in patients with mild to moderate renal impairment, no pilavapadin dose adjustments will be required. These are important findings that support a broader potential patient population to be included in the Phase III studies.

So what's next for pilavapadin? With the results from our Phase II program, our request for an end of Phase II meeting with the FDA has been granted. We are scheduled to meet with the agency by the end of this year and receive written feedback from the agency by early next year. In parallel, we are progressing our planning for a Phase III program in DPNP. We have incorporated the input from our Scientific Advisory Board who were supportive of our Phase III development approach as well as elements from the recent guidance from the FDA on non-opioid clinical development. In conjunction with this activity, we continue to have ongoing engagement with potential partners.

Now, to shift our attention to sotagliflozin, where we believe our opportunity continues to strengthen with time. INPEFA has remained on the market in the U.S., and we see steady sales from our base of loyal prescribers. We also continue to build distinguishing evidence from investigator-initiated studies supporting sotagliflozin's mechanism in hypertrophic cardiomyopathy, heart failure and in major adverse cardiac events, or MACE.

Beyond heart failure, where sotagliflozin has been approved in the U.S. based on clinical data from 2 large outcome studies, enrollment in our Phase III program of sotagliflozin in HCM continues to accelerate. And lastly, as Mike outlined earlier, we are maintaining close communication with the FDA about the potential resubmission of Zynquista in type 1 diabetes. We strongly believe these 3 factors are integral in establishing sotagliflozin's potential as a new class of therapy.

We have 3 upcoming data presentations this week at the AHA Scientific Sessions and the HCM Society meetings, which will highlight sotagliflozin's unique potential across diverse patient populations. As you may know, cardiac care is complex, involving multimodal treatment in an effort to improve overall patient outcomes. Of particular importance for us, many patients who have hypertrophic cardiomyopathy go on to experience major adverse cardiac events such as myocardial infarction, stroke or heart failure. At this weekend's meetings, Dr. Qin from Boston University Medical Center; Dr. Badimon from Mount Sinai in New York City; and Dr. McGuire from the University of Texas will highlight, respectively, sotagliflozin's impact on cardiac remodeling in HCM, an AHA late breaker on the benefits of sotagliflozin in HFpEF and a presentation on the effects of MACE events in patients with type 2 diabetes.

SONATA-HCM is a large global registration trial with a KCCQ endpoint designed to support a regulatory filing and broad label in HCM. SONATA-HCM is the only ongoing registrational trial currently evaluating a treatment in both obstructive and non-obstructive HCM. We recently completed the target 130-plus site initiations in 20 countries across the United States, Europe, Israel and Latin America. This is an important milestone for the program, and I couldn't be more proud of the team's significant efforts in achieving this goal. With these site initiations complete, there has been a significant acceleration in study enrollment.

I'll now turn over to Scott to provide an update on the company's financials.

Thank you, Craig, and good morning, everyone. For the third quarter of 2025, we reported total revenue of $14.2 million compared to total revenue of $1.8 million for the third quarter of 2024. Q3 2025 revenue consisted primarily of $13.2 million of licensing revenue recognized from our agreement with Novo Nordisk. Licensing revenue under this agreement is being recognized as the IND-enabling work is completed. Through September 30, 2025, a total of $40.7 million has been recognized as licensing revenue from this agreement with the remaining $4.3 million expected to be recognized in Q4. Total revenue for the quarter also included net product revenue of $1 million from sales of INPEFA.

Research and development expenses for the third quarter of 2025 decreased to $18.8 million from $25.8 million in Q3 2024, primarily reflecting lower external research expenses associated with the completion of our PROGRESS clinical trial, partially offset by increased investment in our SONATA Phase III clinical trial in HCM.

Selling, general and administrative expenses for the third quarter of 2025 decreased to $7.6 million compared to $39.6 million in 2024. The continued decrease reflects lower costs as a result of our strategic repositioning in late 2024 and significantly reduced marketing efforts in 2025 for INPEFA as well as general diligence and focus on operating our business efficiently.

Net loss for the third quarter of 2025 was $12.8 million or $0.04 per share as compared to a net loss of $64.8 million or $0.18 per share in the corresponding period in 2024. We ended the third quarter with $145 million in cash, short-term investments and restricted cash as compared to $238 million as of December 31, 2024.

I would also like to note a few other items from the quarter. On the expense side, we continue to reduce costs and streamline our operations. Quarter-over-quarter operating expenses decreased by $39.1 million, primarily due to the strategic repositioning as an R&D-focused company.

We are maintaining our full year 2025 guidance for operating expenses. Total operating expenses are expected to remain between $105 million and $115 million, with R&D expenses projected to be between $70 million and $75 million. SG&A expenses are expected to range between $35 million and $40 million. Our R&D expense assumptions do not include costs associated with Phase III pivotal studies of pilavapadin as our goal would be to take this asset forward with a development partner.

Overall, we are in a strong position with the resources needed to advance our ongoing clinical programs while maintaining a disciplined approach to capital allocation and a focus on creating value for our shareholders.

I will now turn it back to Mike for his closing remarks.

Yes. Thanks, Scott. Look, you can see that we have achieved quite a lot already in 2025, and I'm excited about where we continue our strong execution to wrap up this year.

As I shared earlier regarding pilavapadin, we're planning for an end of Phase II meeting by year's end. Our preclinical work continues as we explore the broad potential value of this asset and evaluate expansion into additional indications. Additionally, a partnership for pilavapadin will allow us to become therapeutically focused on our core cardiometabolic programs and expertise.

For SOTA in HCM, we're really excited to share results from complementary studies of SOTA starting this upcoming weekend with AHA, which could provide valuable additional insights on this therapeutic candidate. In parallel, our SONATA study sites in the U.S., EU, Israel and LatAm are enrolling according to plan with all Phase III sites up and running.

For INPEFA, our partner, Viatris, continues to make progress against plans for regulatory approval. Sotagliflozin was recently approved in UAE and now has been submitted for approval in Saudi Arabia, Canada, Australia and New Zealand, where there are a significant number of potential patients in need. In addition, Viatris has announced plans to submit for approval in additional markets, including Mexico and Malaysia by the end of this year. That's a total of 6 important markets to be filed by the end of the year, and we're thrilled with the momentum that we're building together with Viatris.

For Zynquista, we're working closely with the FDA on a potential path forward for T1D. The agency confirmed that they expect to provide written feedback by year's end. And following alignment with the FDA, we'd work to submit our NDA as early as possible in 2026.

And finally, LX9851, our IND-enabling studies for obesity have been completed, and we anticipate that Novo will expediently prepare and file the IND and advance into clinical development.

So looking ahead to 2026, we plan to maintain focus on what we believe makes Lexicon well positioned for success. We got a strong pipeline of differentiated assets, not only first-in-class, but first-to-market potential in therapeutic areas of high unmet need. We're excited to embrace these opportunities and showcase what we achieved going into next year in our future updates.

So we've got time now for some Q&A. So I'll turn it back over to the operator to manage the questions.

[Operator Instructions] Our first question comes from the line of Andrew Tsai from Jefferies.

Congrats on the progress. This is [ John ] on for Andrew. So for Zynquista in type 1 diabetes, you're seeking regulatory feedback in Q4. Are you looking for like a simple yes or no? Or just looking for like whether a resubmission would make sense? Or is there like perhaps more color that you're seeking? And then if you're able to resubmit in 2026, would it be a Class I or Class II resubmission?

Yes. Thank you for the question, John. It's Craig Granowitz. As Mike has mentioned and we've discussed previously, we're really leveraging ongoing trials, particularly the STENO trial in Denmark to use the exposure data in a very large number of patients to address the single concern that FDA raised at their end of review meeting, which is a prospective study to document rates of diabetic ketoacidosis. And as you might recall and as the CRL letter that was made public by the FDA a few months ago mentioned, "FDA accepts that there is efficacy with this drug, has meaningful reductions in A1c, meaningful reductions in severe hypo effects and obviously, the proven outcome that we've already seen in the labeling we have in patients with type 1 diabetes and heart failure.” So we are using the STENO trial with adequate levels of exposure, which is what we're really discussing with the FDA to prepare a submission really focused on that one single issue.

To answer your second question, while we don't have final written confirmation of this with the FDA, our expectation is that this would be as a resubmission, a 6-month review clock.

I think, John, just to provide a little more color from my side, I think what's really pleasing here is that the FDA has endorsed and accepted that the STENO protocol and patients that they're capturing are acceptable and the way they're capturing DKA is acceptable. So as we move forward, it really is around appropriate exposure levels to be able to give them confidence that the positive data that we are seeing gives them confidence for resubmission.

Great. And then maybe one more, if I can. For those third-party IST studies for SOTA in HCM and HFpEF, how do you expect the non-HCM data to perhaps give you greater conviction in the Phase III SONATA study success?

Yes, it's a great question. Clearly, there's an overlap between HFpEF and HCM. From a clinical standpoint, they are, in essence, indistinguishable. You see a very similar profile. You have normal ejection fraction, but you have patients that have symptomatic dysfunction, particularly diastolic dysfunction. And I think as you've seen with the CMIs, they're actually trying to go from HCM into HFpEF. I think they're having some challenges with that because a lot of patients are then developing ejection fractions that are dropping below 50%. We believe that by demonstrating data, and you'll see some of that as early as this weekend in the [ SOTA-P-CARDIA ], which is an oral late breaker at AHA as well as our continued mechanistic data that will be presented on tomorrow, actually Friday at the HCM Society meeting, we are distinguishing the effects of sotagliflozin in both the preclinical models, the animal models on energetics and cardiac remodeling that will fit very nicely with some of the clinical results that you might be seeing in HFpEF patients that will be presented at the SOTA-P-CARDIA data on Saturday at HCM.

So it continues to build a wall of evidence that is similar between HFpEF and HCM regarding cardiac energetics, cardiac remodeling, cardiac fibrosis and ultimately improved functionality and symptomatology in patients either with HFpEF or with HCM.

And John, again, allow me to sort of pile on there, I guess, more from a sort of commercial bent of how we see this. We have this program in HCM for both obstructive and non-obstructive thinking that a medicine that is oral once daily, easy to use and a well-known and understandable side effect profile, particularly given the data coming out of MAPLE really gives us a great opportunity potentially to work alongside CMIs, but in a first-line position in HCM.

And that first-line position, particularly as you're sort of expanding outside of the HCM centers into retail cardiologists and large-scale cardiology practices allows HFpEF and HCM, the patients present very similarly in those offices. And so having SOTA as an option for both HFpEF and a differentiated option for HFpEF and HCM gives the cardiologists peace of mind that they can use this medicine very successfully in either condition and particularly in non-obstructive where diagnosing the difference between the 2 is a little more challenging.

So both from a utilization as well as scientifically, we continue to generate additional data that will help support the use of this in a broad range of cardiology patients in across the cardiology community in the U.S.

Our next question comes from the line of Yigal Nochomovitz from Citigroup.

Congrats on the progress. This is [ Joohwan Kim ] on for Yigal. Maybe just 2 quick ones from us. Regarding the partnership opportunity in DPNP, can you orient us on how far along you are in identifying a partner and remind us whether or not you are awaiting to complete the discussions for the end of Phase II meeting with FDA before completing any partnership agreements?

Yes, that's a great question. So over the last, I'd say, 4 to 6 weeks, we've reengaged with a range of partners who we had originally discussed the top line data with. Obviously, the data that we presented over the last month, including the totality of the Phase II program, we've had the opportunity to talk with all of these partners. The end of Phase II meeting is a very important milestone in those discussions. I think it's fair to say in a space where there's been nothing developed for 2 decades in a space where new draft guidance has come out, it's important to have that confirmation as a part of those overall discussions.

So we're really looking forward now that, that end of Phase II meeting is scheduled for this year to continue to progress around that. We feel very confident actually with the dossier that we've submitted and are really looking forward to having the FDA's endorsement on what we think is a robust Phase III program that reflects their draft guidance, and that will certainly be a part of the partnering discussions that we're having.

Got it. And just one more, if I may. Understanding that you're seeking a broad HCM label. But in your discussions with the FDA, have they suggested the possibility that you would also be able to get approval for specifically non-obstructive or obstructive HCM as data from SONAT is stronger in one particular subgroup?

Yes. Very good question. We're approaching it similar to how we approached heart failure, and we had a broad label for heart failure regardless of whether it was HFrEF or HFpEF. And we're really taking that same approach with the FDA and the commitment we have on them when we met with them to discuss the protocol before initiating the trial was that this -- if the study is positive as conducted, would give us a label that would include both obstructive and non-obstructive patients. So we are seeking that. We are looking to have 2 groups of 250 patients each within the study. There is a stratification by obstructive versus non-obstructive, but the overall endpoint is anchored to the overall population.

Our next question comes from the line of Joseph Pantginis from H.C. Wainwright.

So a few as well, if you don't mind. So first, I think it would be helpful if you remind us when SONATA moves forward and if it were to be positive. Can you discuss the positioning, especially with the continued growing excitement in the HCM space and the role of CMIs and the hopefully upcoming approval of aficamten. So where would SOTA be positioned with regard to these other assets?

Yes. It's a great question, Joe. So I think it's firstly important to note that patients on a CMI are actually eligible to enroll in SONATA. And we've purposefully taken the approach again of using a very pragmatic trial that SOTA can be used in conjunction with underlying meds that are used in hypertrophic cardiomyopathy. Now, where I would see the positioning is typical across a lot of chronic medications in as much as those medicines that are somewhat more laborious, somewhat more costly often depending on sort of where it ranges and often positioned as sort of later lines in therapy.

And we would see sotagliflozin as we discussed a little bit earlier, as being a broad potential not only being used in the somewhat restrictive academic centers that have HCM study sites and clinical sites, but really across the broad scope of cardiology because it's a known mechanism. It's easy to use. And if we get positive results out of SONATA in both obstructive and non-obstructive, it allows this broad utilization and particularly given the results of the MAPLE trial, which showed that, in fact, beta blockers don't necessarily add any value, and there's a question as to whether, in fact, they may be causing some harm in HCM. I think that offers for us a really good opportunity to become a first-line agent in HCM, both obstructive and non-obstructive.

Mike, if you don't mind, I just want to add one other point. I think it's becoming more clear, Joe, and I think you've seen and heard some of these presentations even very, very recently that all of the CMIs that are currently under regulatory review will have REMS of some sort. And that certainly does put significant paperwork and process in place for patients being initiated. I think that inherently is going to limit the sites that are willing to do that because you need to have a critical mass in order to create the paper workflow. And there'll be many places that will have HCM patients in relatively low numbers that will not be willing to take on that burden.

So I do think the fact that the CMIs will have REMS and there might be differentiated REMS between them, but they will be what I would call significant limitations that are always a part of a REMS, and we don't have any inclination that, that would be the case with SOTA, which is a well-known agent that has already an indication for heart failure.

That's really helpful. And then I'll just ask my last 2 questions together. So first, with regard to the upcoming end of Phase II study, you've already provided some nice details around that. I just want to make sure I understood, you already have a lot of great feedback. Is there anything you would describe as questions that are left to address or finalize, number one?

And then if Zynquista were to move forward on the regulatory front in a positive fashion, what kind of commercial plan would you potentially be looking at, bringing it forward on yourself, a potential partner or what have you?

Great. I might throw the first one to Craig, and I'll take the second one.

Yes. Joe, great question on the end of Phase II. I think when it comes to the endpoint, the duration of the study, the patient population, I think we feel very comfortable with that, and I think that's been validated as well for other companies that are in Phase III in neuropathic pain and diabetic neuropathic pain that it will be 2 trials of roughly 300 to 350 patients each with a 12-week visual analog pain score with an average daily pain score outcome.

I think with any centrally acting agent, some of the areas of discussion are going to be regarding potential for central effects such as drowsiness. I think there's always going to be a question with any agent in this regard, even though there is no reason to believe and we don't believe that there is any issue of human addiction potential type activities. But we don't believe that there are any meaningful or significant next-day drowsiness or other central effects of this agent. And there is no indication in that large Phase II program that we've run, including a blinded withdrawal that there is any issue around addiction potential, but those certainly are areas that could be points of discussion with the FDA.

Right. And I very much appreciate, Joe, the question on the commercialization of Zynquista and to a degree, also thinking forward for HCM. And just allow me a couple of moments here to talk a little bit more generally and philosophically about how we're commercializing sotagliflozin. As you know, one of the first things that we did when I came into Lexicon was unfortunately having to relook at how we commercialize INPEFA. I want to state categorically that both Zynquista and for HCM are not going to be INPEFA situations for a couple of reasons.

As you know, INPEFA was third to market, actually fourth really in a space where there were 3, particularly 2 major incumbents and that made market access incredibly difficult. What we're seeing actually is that when physicians use this medicine and patients use them, it's incredibly sticky, but access was a very difficult situation. That is not the case for Zynquista and HCM. Why is that? Because it will be the first and only SGLT inhibitor potentially indicated in each of these indications. That does a couple of things. First, it allows us to completely rethink our pricing in both of these indications, and that has certain implications, particularly in HCM, where the CMIs are priced at a significant multiple to what other medicines are being used. But secondly, and perhaps more importantly, there's not an ability at the payer level to substitute, to step through.

And so the access conditions for Zynquista and HCM are very, very different. Now that does not mean that we intend to go with a full-blown commercial model -- traditional commercial model. And in fact, that's part of our installing the INPEFA virtual sales support system that we've got, which is all encompassing, and we'll have an opportunity perhaps to talk you through that, which is a good way for us to learn over the coming months of how we do this in a nontraditional way, whether that be completely virtual field presence, whether that be looking at a hybrid, whether it be even partnering on co-promotion, which could be an option. We're exploring all of these details in parallel.

And of course, the other thing that makes us really excited is we have partnered with patient groups over years now, well before I joined the company, and there's interesting commercial models that we can use and utilize some of this patient-driven advocacy like, for example, in my experience, we've seen with migraine and other conditions where patients just have this built-up pent-up demand, and we can do it in a very unique way. So more to come on that, but we're certainly exploring how we intend to potentially promote Zynquista should it come on the market.

And especially on the last commentary, it sounds like you have the ability to leverage a lot of optionality.

Our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

This is [ Dominic ] on for Yasmeen Rahimi. Congrats on a great quarter. So we were looking at HCM. We know it's going to be an exciting year this year and especially considering that there's going to be a few presentations on the SGLT1 and 2 inhibitor class in HCM in the preclinical models. Could you help us understand how much proof-of-concept data we could gain from these presentations in HCM?

Yes. Thank you, Dominic. We look at any one of these presentations and particularly a preclinical model as part of a broader tableau around the mechanism of action and particularly the functionality of both the SGLT1 and the SGLT2 effects of SOTA, whether we're looking at the effects on stroke and MI, whether we're looking at the effects in HFpEF over looking at the effects in HCM. And as you know, we've generated data on all of those over the past year and have published on that extensively.

The data from the Boston group that will be presented tomorrow at the HCM meeting, I think, continues that narrative. And in a particular murine model, this group has a lot of experience and a long track record. And the effects that they've seen with SOTA in that model, and I don't want to presage their presentation, but I think are quite dramatic. And I'll just sort of provide the overview is that it's affecting the energetics and there are some mechanistic data around the energetics effects of SOTA in that model. And by affecting and improving cardiac energetics, you're improving fibrosis and other cardiac remodeling, but most importantly, ultimately, diastolic function.

And as you know, the major physiologic issue in HCM is diastolic stiffness. So there's really 2 main issues physiologically in human hypertrophic cardiomyopathy. In obstructive, there is a physical barrier to outflow tract obstruction, and that really is what distinguishes between obstructive and non-obstructive HCM. But fundamentally, the issue that is common, whether it's obstructive or non-obstructive is cardiac hyperdynamic function that the actin and myosin are overly active, and there's also an issue around altered energetics.

And we believe that sotagliflozin is acting on both of those fundamental physiologic characteristics. And that's why we believe and we had strong support from the medical community and the FDA that we could study both obstructive and non-obstructive in the same trial because the underlying pathophysiology is the same regardless of whether they are obstructive or non-obstructive, which is really defined anatomically as opposed to physiologically.

Great. That was definitely helpful. And then we just had one more. Once pilavapadin's end of Phase II meeting is complete, and I know you touched on this a little bit earlier, but how soon do you envision a partnership materializing? And then what are your thoughts on the type of deal that you could explore you would be interested in?

Yes. I think we will continue those engagements after the end of Phase II meeting and certainly into the start of 2026. I think the type of partnership that we're -- and the type of partners that we're engaging with are really pretty diverse. And I think that gives us optionality as to how we take our involvement with pilavapadin forward. And so we'll continue to engage with them. We'll wait for the minutes, obviously, to have that formalized, which will be in early 2026, and then we'll take it from there.

I am showing no more further questions. We will now turn it over to Mike Exton, Chief Executive Officer of Lexicon for closing remarks.

Well, thanks very much, everyone. Thanks for the great questions. I really enjoyed those and look forward to discussing in more detail with you soon. I think -- and I hope that what you've seen is that this year, Lexicon has really put our nose to the grindstone and focused on reshaping the company and advancing our pipeline forward. We have a number of great things happening in the next couple of months really as we close out the end of the year and into 2026. So look forward to sharing more information on all of those at future updates. So thanks very much, and have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Okay. Welcome back, everyone, for those listening in the room and on the webcast. I'm Yigal Nochomovitz, biotech analyst here at Citi. And this is the second day of our biopharma back-to-school conference. So everyone is back to school, including the biotech people. And so it's my pleasure to have the senior management of Lexicon Pharmaceuticals here with me, Mike Exton, CEO; Craig Granowitz, CMO. So thank you, both of you for joining. Appreciate it. Obviously, a lot going on at Lexicon. The company has evolved a lot. New programs, new data.

So Mike, do you want to start, set the scene for us. A lot of people just want to hear the basics. What are the programs and what are the key catalysts coming?

Yes. No, absolutely. It's been a busy 2/3 of the year. And now that the kids are back at school, it's going to be a very busy back third, I'd say. So yes, look, it's been a very interesting year for us as we started the year pivoting back towards a pure R&D company to focus on the pipeline. And as a result of that, we've made great progress, I believe, across the main 3 assets that we have in the pipeline. And taking them somewhat chronologically, we -- in the first quarter of the year, we licensed LX9851, which was a preclinical asset for obesity and related conditions. We signed an exclusive worldwide license to Novo Nordisk for that particular asset. We're delighted to be able to have done that and that they see the value in that asset with, as everyone is aware, one of the world leaders in obesity, and we can talk a little bit more about that program.

We read out the PROGresS phase IIb study in diabetic peripheral neuropathic pain for pilavapadin, a novel non-opioid medicine for neuropathic pain as well as other related conditions that we're also investigating preclinically. We've spent the last 4, 5 months really digging into that data set and looking now across the platform of the Phase II program to see and analyze all of that data moving towards an end of Phase II meeting late this year.

And we feel having analyzed all of that data, and we'll talk about that, obviously, that the 10-milligram dose is fully endorsed by us and Scientific Advisory Board and others to move into Phase III, which we can start in early next year, potentially the very first non-opioid oral medicine in diabetic peripheral neuropathic pain to be approved in 20 years or so.

So that's an exciting program. And in fact, now that schools' back, September will be an incredibly busy month of data rollouts at various medical meetings, and everyone will get an opportunity to really see eventually the full data set from the -- across the platform that gives us confidence moving into Phase III.

And last but not least, with sotagliflozin, we continue to sell INPEFA in the marketplace for heart failure. And actually, we're selling about the same this year as we did last year with a skeleton resource that's going very well. For Zynquista, we continue the end of review engagement with the FDA. And perhaps most importantly, certainly coming out of the European Society for Cardiology meeting, where there was a lot of great data both from us and others that I think has significant read-through to our HCM program, hypertrophic cardiomyopathy. And so that gives us a lot of confidence in the SONATA trial, which is really enrolling very well, looking for completion of all patient enrollment in 2026.

So really a lot of great things that have been done and a lot more to look forward to over the next quarter or so.

Okay. Well, let's -- maybe let's start with the Cardio and HCM considering that was the weekend big news for biotech. And you had a pooled analysis on SCORED and SOLOIST, correct? Can you talk about that? Because obviously, those were the heart failure studies, but I'm curious what you drew out of those -- that new analysis that may be helpful or interesting with regard to HCM.

Yes. I'll let Craig take you through the data for the age breakdown. But not only did we see that data, but also, Craig, maybe you can comment on DAPA ACT, which was in recent on worsening heart failure, which really showed that sota is the medicine premier amongst the SGLT inhibitors for that particular condition.

Yes. I'll start, Yigal, with the data that we presented, as you referenced, is that we did an analysis of the pool, 12,000-plus patients in the heart failure program, both the recent and worsening heart failure and the chronic and at risk for patients for heart failure. And what we found was a consistent response across that age group even up to and beyond age 75, which, as you know, HFpEF is a group largely of more elderly rather than younger patients, unlike HFrEF, which is generally 5 to 10 years younger in age of onset.

And what we found is that there was a consistent response. The overall risk is higher, the older you get, but the relative risk reduction was consistent across all of the age groups that we looked at. I think also importantly, 2 other key points. The first is that there was also a consistent reduction in MACE events, which we continually see, which is unique to sota in the SGLT class. And the other is that the safety was similar again across all age groups, including even the very elderly in that study.

So we thought that this was -- analysis was important on a number of levels as we continue to move into the heart failure space. Mike did mention, and this might be a follow-up question, but I'll just touch upon it, is that, as you know, one of the key trials of that meta-analysis, the SOLOIST trial is a trial in recent and worsening heart failure. The population and the endpoints are almost identical to the 2,000-plus patient TIMI-sponsored trial that was done with dapagliflozin in recent and worsening heart failure, which missed its endpoint, showed about a 10% to 15% reduction at 60 days post release from the hospital. We have a 50% reduction in hospital readmission at that time point.

So again, and they put this as part of the meta-analysis in that study. If you look at the 3 key trials that have been done in the SGLT class in recent and worsening heart failure study with empagliflozin called EMPULSE, dapagliflozin called DAPA ACT and SOLOIST, we have a 50% reduction in hospital readmissions and cardiovascular death at either 30 days, 60 days or 90 days.

And if you look at the data that was presented by the investigators from TIMI, there is no difference in response with the SGLT2 inhibitors at 30 days, in statistically nonsignificant reduction at 60 days and in EMPULSE, really not even a meaningful difference until day 90.

So to what do you attribute this? I mean, obviously, yours is the dual mechanism, SGLT1, SGLT2. Is that the driver? Or are there other aspects of the trial design or entry criteria that may have impacted how they got there missed and you did not miss?

Well, I think the trial designs are actually quite similar. These are stabilized patients with a hospitalization for heart failure. Once they are stabilizing in the hospital, they are then switched over to therapy prior to leaving the hospital. So these groups are all roughly the same in terms of patient characteristics and underlying other medications. I think you touched on it, which is why we continue to be so bullish on our value in HFpEF and in HCM is that there are direct effects that the SGLT1 blocking mechanism has above and beyond those of the SGLT2 inhibitors because there are also SGLT1 receptors on the myocardium.

And as was in a review article by Eugene Braunwald on HCM in New England Journal of Medicine this week, it talks about cardiac energetics, which I think we've touched upon a little bit, and we expect more data will be coming is that there are unique and differentiated effects of sotagliflozin on the cardiac energetics, which is particularly important in HCM.

Now you -- I mean, the SCORED and the SOLOIST data that you've had that for some time. I'm just curious on the timing of the pool, this pooled analysis, this was just a new way to look at the data set or just explain how this happened now versus -- because I would imagine you had this data for some time or no.

Well, it's a great question, Yigal. And I think as we continue to probe more deeply into HFpEF and again, going back to the myocardial effects and as you know that with the SGLT2 inhibitors, the effect size minimizes over time over ejection fraction as you're getting close to normal ejection fraction as has been published by -- with both DAPA and EMPA , there is a mitigation, in fact, no benefit at those with higher ejection fractions, if you look at KCCQ score, 6-minute walk test with either EMPA or DAPA. And with sota, one of the areas we think, again, with these SGLT1 effects that we have consistent risk reduction across the entire range of ejection fraction.

So as there is a bias towards the more elderly patients and people have asked us about an age effect that we thought this was something that was meaningful. And I think ESC felt the same way having it presented as an oral presentation at the meeting.

And I think as we look at that commercially, maybe this is also a good segue into HCM is for a patient that's turning up into an office, cardiology office in the community, and that physician is looking at the patient either potentially with HFpEF and/or with nonobstructive HCM by demonstrating the efficacy of sotagliflozin in HFpEF together with our data that we'll see in SONATA in nonobstructive HCM, it's nearly a one-stop shop for treatment of either of those patients, which until you do further testing and diagnosis, that patient could be presenting with. So it allows a physician, cardiologists to prescribe with confidence a medicine that could be applicable in both disease states.

It's a specialized area. I mean it's a big area, obviously, a lot of patients, but it's still specialized and not a lot of -- even a lot of knowledgeable investors don't necessarily know exactly that -- can you just explain the difference, HFpEF versus the nonobstructive? Like what are you -- what are the separate telltale signs of each one? And is it easily modeled? And how do you make the differential diagnosis? Or can it be both? Or how does that -- how does that all work?

So if you think about the overall disease, clinically, if you look at a patient, there's no difference between a nonobstructive HCM patient and a HFpEF patient, right? They present the same way. It's a person with normal ejection fraction but has heart failure, symptoms of heart failure and radiography consistent with that, a big, thick left ventricle. So those are, in a sense, from a clinical standpoint, grossly the same disease, right? It's sort of like...

So there's a reason to be confused sometimes. Okay.

And I think one of the reasons why there's been such a dramatic underdiagnosis of nonobstructive HCM is unlike obstructive HCM where you see a big outflow tract obstruction and you have a large gradient across the aortic outflow is in nonobstructive, it's not so easy to tell. I think there are a number of diagnostic criteria that are becoming more aware, particularly if you look at EKGs and you do more sophisticated testing looking at cardiac energetics, there are genetic diseases that are associated with HCM, particularly the overactivity of the actin and myosin that you don't see in sort of run-of-the-mill HFpEF.

But the first reason why we started looking at HCM is we did an analysis of those patients that had HFpEF, had left ventricular hypertrophy without hypertension because the major reason why people have left ventricular hypertrophy in the United States and Europe is due to hypertension, right? The heart is pumping against this big pressure gradient for decades and the heart gets thicker. And as the heart gets thicker, eventually, it gets so thick, it outruns its blood supply and you end up with heart failure.

So if you exclude the patients with hypertension, that group is enriched for a group that looks very much and probably had a cold HCM in it in our own clinical heart failure program. We saw a 50% reduction in heart failure events and MACE in that subgroup. We've published that subgroup. It was about 500 patients. That was when we started really looking seriously about sota as a unique agent in the SGLT class for HCM.

And collectively, Yigal, again, just to sort of bring this back strategically where we're seeing it because as you said, we've had the SCORED and SOLOIST data for a long time. We've looked to launch that in heart failure against the SGLT class in general, which makes it difficult from a payer perspective. But as we look forward to HCM being hopefully positive with the SONATA trial, there's a real opportunity for us, particularly in HFpEF for sotagliflozin to be the drug of choice, the first drug of choice for both HFpEF and HCM for which clinically, as Craig said, essentially a community cardiologist sees them present as exactly the same. They can use this medicine because it's safe, it's well known and it's efficacious and more efficacious than other SGLTs in the class.

Okay. Well, that's a good -- a very good review of the landscape. Can we just go through then just the mechanics of the SONATA trial? What exactly are the endpoints? What is the progress of the study? You said I think it's reading out next year?

Yes. We'll finish enrollment next year.

Next year. Okay.

But maybe, Yigal, if you don't mind, before we get to SONATA, it's worthwhile touching on MAPLE and ODYSSEY that read out at ESC. So ODYSSEY was from Bristol-Myers, which was the very first readout of a trial in nonobstructive HCM. As you know, mavacamten or Camzyos is indicated in obstructive because it reduces the outflow tract obstruction, as Craig said. And I'll let Craig describe the study and the outcome. And then the other one was MAPLE, which was a study of aficamten in Cytokinetics, where it compared aficamten versus a beta blocker, which is the typical first-line agent in HCM. In this case, it was in obstructive HCM.

And both of those sets of data, I think, have incredibly useful read-throughs to the HCM program for sotagliflozin in SONATA. So maybe let us touch on that data first, and then we'll move into the mechanics of SONATA.

Yes. So thank you for the question, Yigal. And the ODYSSEY trial was very important because it was the first CMI readout in nonobstructive HCM. And it did not hit either of its 2 prespecified endpoints, which was peak VO2, which is a standard metric for the CMIs in HCM or the KCCQ, which was -- is really the primary endpoint. And they split the alpha. I don't want to get into too many technical details statistically, but they put most of the weighting of the endpoint on the KCCQ, and they miss on both those endpoints.

So there's a question of, will the class of CMIs work as well in nonobstructive HCM as they do in obstructive HCM because I sort of look at the CMIs as kind of a medical septal reduction surgery, right? They are very effective, both afi and mava at lowering the outflow tract obstruction in obstructive HCM. The issue is, though, that the underlying disease process, and this gets to why our trial design is what it is, the underlying dysfunction between obstructive and nonobstructive HCM on the myocardium in the heart muscle itself is similar. And we believe that sotagliflozin and uniquely sotagliflozin in the SGLT class and very differently than CMIs are working to address that metabolic disorder of the myocardium in HCM, that is the unifying hypothesis in HCM, which is the fundamental physiologic problem.

And you see that because if you do septal reduction therapy, in symptomatic HCM patients, 10% to 20% of those patients within a few years go on to develop heart failure. So they are converted from an obstructive HCM patient to a nonobstructive HCM patient. And again, one of the reasons we have the quality of investigators and the interest in the field is that we are addressing that underlying fundamental pathophysiology. So that's sort of the ODYSSEY trial. The MAPLE trial...

Just to clarify this, have we had a CMI ever work in non-HCM or that's never...

Nonobstructive.

Nonobstructive.

Not in a large randomized controlled trial. ODYSSEY was the first and it was not successful. There's a trial that is being run right now by Cytokinetics called ACACIA which is fully enrolled. And I think as you heard or your listeners heard yesterday from Cytokinetics that, that trial, I believe, will be reading or finishing next year.

Okay. Okay. Now let me want you to talk about MAPLE.

So MAPLE, I think, is a very important study, and Mike and I were talking about this. I think we didn't realize just how meaningful it was to the field because what it was, was a first-line therapy of CMI, in this case, aficamten against a beta blocker and beta blockers have been used for decades, really since beta blockers and HCM were identified without much clinical evidence to support their use.

I think one of the takeaways from MAPLE, as much as aficamten was successful, it also highlighted that beta blockers might actually cause harm. So I think there's a rethink now or will be a rethink after the meeting of what is the role of a beta blocker in HCM at all because the outcomes in that were arguably worse than the baseline after the patients were on a beta blocker for the duration of the study.

So not only did aficamten improve many of the endpoints, but that the beta blocker actually, the endpoints were worse at the end of the trial than the beginning.

And so one could conclude from that data that potentially aficamten could be used as a first-line agent in obstructive HCM. That is practically unlikely, mainly because of cost, access, the logistics involved in getting a patient on and maintaining them on a CMI. And so our take home for sotagliflozin is that, in fact, beta blockers potentially cause harm. They're the go-to first-line agent in HCM. And now there will be a rethink in the cardiac community. And in fact, sota is well positioned to be that first-line treatment so long as SONATA is positive with following use of a CMI should it be needed for worsening or more symptomatic HCM further down the track.

So really position sota to take that first-line therapy option in both obstructive and nonobstructive HCM.

So the point of MAPLE is that because you are running the beta blocker versus the novel therapy, this exposed the weakness of the beta blocker because you just didn't have a randomized study to do this before?

Exactly. That's exactly. No one -- who is going to run that trial, right? So this was sort of...

It was an intended consequence.

It's been, in a way, just a natural thing for clinicians to do. Beta blockers are very effective medicines for a range of different conditions. And so it made sense for them to try it, but without any evidence. And now really for the first time, and kudos to CITO for running this study, it really showed that, that is a false assumption, and they need to rethink.

Not to distract too much from the Lexicon discussion, but in this -- in MAPLE, so did the study work because afi worked or because beta blockers failed?

Both.

So again, so the issue is if you compare to baseline, afi was successful in their endpoints. And again, I don't want to overspeak for Cytokinetics. But the beta blocker also was worse. So when you look at compared to the active arm, it made the results look even better.

Yes. Okay. All right. So that brings us to your...

So that -- so I think long wind up for the pitch.

I'm not going to talk about that.

Good. We got to talk. I think that really highlights your original question way back when on the importance of the trial design of our study, the SONATA-HCM trial.

I think there -- this -- all this background is very important because we thought about this as we designed the trial because there's a number of very different attributes in the trial design. The first is that it is the only trial that's looked at both obstructive and nonobstructive in the same trial. And the primary endpoint of KCCQ, which is symptom relief, which is really what the CMIs are approved for is symptom relief is the primary endpoint in the trial.

And by including both obstructive and non-obstructive, we believe since the fundamental mechanism underlying the both is the same, that's why we put them together. Just like we were the first to do in heart failure, a HFrEF and HFpEF study together in the same trial. So that's one attribute.

The second is, as I think you're aware, is that one of the big concerns with CMIs is potentially causing heart failure that the major issue and the reason for the REMS is that EFs drop below 50%. And that was clearly a major problem in the ODYSSEY trial for BMS is 20% of the patients had an EF drop below 50%. We are allowing patients...

That's interesting. What's the reason -- I mean, because I thought the whole idea was improving the microtubule contractility, right?

Well, actually, it's the opposite. It is reducing the force of the overcontractility. So the whole idea is correcting overcontractility. And again, I don't want to speak for those that are expert in this area, but my understanding is that one of the issues is that you are, in a sense, making the actin and myosin less overactive than the disease state causes. And the underlying pathophysiology and the way that the CMIs are working is they are working to change the interaction between actin and myosin, which results in excessive oxygen consumption. In fact, most early patients with HCM have an over-dynamic ejection fraction. The heart is too active. The flip side of that is that in a percentage of patients, you actually have their ejection fraction drop below 50. So in a sense, we're an agent and we're indicated to prevent and reduce heart failure. These are agents that the REMS are put in place because they result in heart failure.

So we also -- in our entry criteria, if the patient is not on a CMI, and I'll get to that in a minute, the ejection fraction inclusion criteria is 50%. The CMIs are at 60. If the patient is on a CMI and we allow patients to be on CMIs, that inclusion criteria is 55%. But again, we are allowing patients in the trial with a lower baseline EF than the CMIs because we don't have a heart failure issue with our drug. We prevent heart failure.

The third point I already touched upon is that we're allowing any patient on any therapy that has symptomatic heart failure by KCCQ at baseline. So they can be on a beta blocker, they can be on a calcium channel blocker. They can be on disopyramide, they can be on a CMI. They can be on any of those therapies. The key inclusion criteria is the diagnosis of HCM, whether obstructive or nonobstructive and have a KCCQ score below 85. That's it.

The other important point during the therapy, for example, if you look at a trial like ACACIA, there are about 9 echoes that need to be done during that treatment. We have 3. So again, the burden of monitoring, the burden of the endpoint is far different than the CMI trials have been and are currently running.

So there are a lot of moving parts to the study because you've got the obstructive, the nonobstructive. You've got whether they're on the CMI, not on the CMI. I guess there's some stratification, so it's all balanced out.

And then like how do you win? I mean, you can win on everything. Do you have sub analysis? So if you hit it on the HCM, it's one; if you can get the label, if you hit it on none, it's a label, like what is the hierarchy of analysis? How much of that have you talked about publicly? I don't know?

We haven't discussed a lot -- I mean, we have talked about the fact that the endpoint is powered for the overall group. Again, just go back to what we did with SOLOIST in heart failure. So what the FDA generally does and they did in the case of SOLOIST is the study and what we've agreed with the FDA already because we did go down to the agency before we started this trial, and we agreed on endpoints and statistical methodology and a statistical analysis plan is that the study is powered for the overall group, and the patients are randomized 1:1. So it's 250 patients with obstructive, 250 patients with nonobstructive in the trial. The study is powered based on the overall result. We will look at an interaction p-value between obstructive and nonobstructive. But as I said, and I think we feel very confident about this based on our interactions with the KOLs, since we are addressing an underlying physiologic issue, there probably is not going to be a major effect -- effect size based on whether they're obstructive or nonobstructive.

And the comparison is what?

Placebo.

Placebo. Okay. And so that -- was there a thought that you would do beta blockers or that was never...

Remember, beta blockers are -- we're allowing them to be on or non on.

So they're on them in the background on both sides.

Correct. Beta blockers, calcium channel blockers or CMI. Remember, the key inclusion criteria is symptomatic disease, whatever their underlying therapy, right? We're just enrolling patients based on symptoms.

But then once -- obviously, once they're enrolled, I mean, then they must stay on their -- whatever background they're on, they're forced to stay on.

Yes, there are certainly elements in the protocol because with CMIs, there are dose adjustments. But one of the inclusion criteria is that they're on a stable dose of their CMI for a period of time.

I think it's an assumption. And obviously, we don't see the data yet in the enrollment, but I wouldn't expect too many patients in Sonata to be on a CMI. The penetration is relatively small so far in mavacamten. So we'll certainly see patients with background beta blocker calcium channel blockers. Maybe we get some CMIs, but I wouldn't necessarily predict that there'd be a massive group that...

It depends on the results of MAPLE, which I didn't know until -- because I hadn't looked at it closely, but you would want more people on a beta blocker in the control arm. I mean...

Maybe why they're symptomatically...

They're effectively all on beta blockers, Yigal. I mean that's sort of like... Every patient comes in, they're on a beta blocker. Again, I don't know exactly what the numbers are, but my guess is 80% to 90% or more will be on a beta blocker. Now that might change over time, but I think that will take some time to diffuse into the field of changing medical practice to not put patients on beta blockers, especially outside the United States.

Okay. So just one more on HCM. So your enrolling is finishing next year and then data is when?

Well, again, one of the advantage of this is it's a relatively short study with a relatively short follow-up unlike the CMI, where these are new agents in a totally new class and they have a long follow-up period, we don't need to do that because these are proven drugs that are already indicated and on the market. So we will have data, I think we've talked about beginning of '27.

For the KCC. All right. At that point, I guess, would you know the outcome -- I guess that's Cytokinetics question, would they know the outcome of ACACIA by then.

From what they have said, yes.

Okay. All right. Let's shift gears then.

Rapid fire. That's the most we've ever spent on sota. That's really impressive done. That's a great topic.

Exactly. Well, let's talk about pilavapadin. So you did some work with the dose, and there was some discussion around 10 or 20, right, and then you picked 10. So -- and you had the end of Phase II meeting or that's coming up?

It will be at the end of the year.

Coming up. And what do you want to lock down in that meeting?

We want to lock down the design for Phase III and the dosing, which, as we said, we feel very good about. And we're just getting into the final throes of putting all the information together right now for submission to the FDA. So it's really the clinical design of the Phase III program that's important. The dose ensuring, as we've said before, that we believe single arm, single active, single placebo study, so 2 arms in each Phase III study is the way to go, and we just need that confirmed by the FDA.

So you mean it is 2 identicals?

We've already had a pretty thorough meeting with the FDA before we started the PROGRESS trial, which is now completed. And I think what we've seen with a couple of other companies that are also trying to work in the pain space, you need 2 well-designed trials that are run in this area with a positive outcome.

We believe based on the effect size and the variance of the data that about 350 patients per group, so 700 patients in a 2-arm study and 2 of those trials run in parallel would be adequate for approval. We've heard that from the FDA. And I think we've seen other companies now talking about Phase III programs in neuropathic pain, and they came to the same conclusion in that regard.

So we feel quite good about the design, the size, the powering because remember, we have 3 studies that we've run in Phase II with pilavapadin in different neuropathic pain states. And we have now a very good understanding with well over 700 patients treated, over 650 of which were in DPMP and another 50 or so that were treated with PHN that we have a good understanding of this drug and the population PK in terms of exposure and response.

So we have a very large Phase II database on this molecule. I think we want to reaffirm with the FDA our assumptions going in, the dose, the size of the trials, the number of trials and then all the other studies that FDA would like to see that would support the registration. And there are a number of trials we've already run that are nonpivotal trials, but very important for final approval and labeling and just want to reaffirm that with the agency.

I mean it doesn't sound like -- to me, it sounds like it should be fairly clear and straightforward essentially with this. I mean it's -- you're not proposing anything too far afield, right? I mean it is just versus placebo, 2 studies, while you've done the powering calculations. It's just more -- do you expect any pushback from them? Or is it just...

I mean, I think the value of having run 2 Phase II studies and then having the PHN study and then all the other data we've run is that a lot of the questions, I think, have already been addressed. Running pain studies is hard enough. There are enough variables, particularly the placebo effect is a huge issue in this. The issue around concurrent medications is a big issue in this patient adherence, the PRO endpoint.

So one of the approaches we took was the more that we could do in Phase II to simplify the design, simplify the primary endpoint, the better, because when you add arms and you add complexity of endpoints, you increase variability and questions. So we did a thorough Phase II program compared to what has been done historically in the pain space, but we did that specifically to reduce some of the variability and some of the questions that you would have going into a Phase III discussion or pre-Phase III discussion with the FDA.

Did you consider any of these crossover designs where you switch and you put the pila patients on placebo and placebo on pila at the end? And I mean that can -- it sounds more complex, but it's not necessarily because actually you can increase the power in terms of the crossover.

So I think those are great studies for Phase II. I think a variation of that, which some people do if they're worried about rebound effects is to do sort of a withdrawal type study where you have a response and do a blinded withdrawal study. We don't feel that either one of those is relevant, right? We already have 2 studies where we had a blinded runoff period. And I think very importantly, we saw there was no sort of liking potential for the drug, right, because in all of these drugs with centrally acting agents, there's an issue of potential addiction potential. There's also an issue of rebound pain, which is commonly seen in this, in part due because many of the other drugs have very short half-lives.

So we have now demonstrated that there are neither of those in our blinded runoff period. So that the necessity for looking at off-drug effects, and we've also demonstrated and we presented on the RELIEF trial, the first Phase II trial that the benefits of this drug persist for weeks after you stop dosing, certainly because of the long half-life, but maybe we're beginning to do some rewiring of the pain circuitry as well. I mean I think that's purely speculative on my part. But as you know, neuropathic pain is both an issue of physiology and psychology.

Pain is very much a learned and reinforced behavior with people. I'm not saying that in any pejorative way. It's just that when you establish the circuits of pain, you have to rewire the brain with chronic pain to minimize some of that pain state.

Okay. And then the -- and so if you get these numbers that you got in the Phase II, the 1.7 or thereabouts in the 1.3, that would work. That would win, right? If you got those numbers again with your powering, you'd be in good shape?

That would be a statistically significant difference. I think there's a drug that was just recently approved in a pain state for chronic fatigue syndrome that basically that was what they achieved, and they were labeled with 2 studies.

Yes, with 2 studies.

Right. Okay. And those are -- well, so you get the sign-off from the FDA later in the year. And I guess this is more of like a financing question, but do you have the capital to do these studies because these -- there are not 1,400 patients, I think, right?

No, right. The Phase III trials are relatively inexpensive because they're short duration, and there's not a lot of fancy testing, et cetera. So they're relatively inexpensive. Having said that, it's our intention to partner this program, and we've -- we're deep into that process at the moment, working towards the end of Phase II meeting, which will obviously be important for some potential partners to get the outcome of that meeting, even though, as you said, it is pretty straightforward, having the outcome confirmed post meeting could be important for some partners.

And we're really focused on finding as we did for 9851, the best partner that not only can bring the potential pain program forward and invest in the Phase III program, but importantly, look at the overall expansion of potential indications across not only indications in neuropathic pain, but spasticity, potentially, there's other neuroscience types of indications for which we have some preclinical data and making sure we take advantage of the breadth of the implication of AAK1.

And you're looking for what type of a deal? I mean, is it like a region-specific deal or something multinat like...

No, I think it will be worldwide. I think there's various options as to the depth of involvement of Lexicon, depending on who the partner could be. I think the most important thing that we're focused on now is like as we've seen with both Novo and with Viatris, in each case, these partners are fully invested and believing in the mechanism and want to do a very significant broad program in both of those cases.

So I think we're a little bit agnostic to the type of player. And indeed, we're talking to different types of players on different scales, but it's making sure that we truly have someone that's invested in this program for the long term.

All right. Awesome. All right. Well, great. Thank you both very much. We look forward to finishing the enrollment and then be a little while for the data, but certainly will be very exciting to see that.

Great, Yigal. If I could just sort of finally point everyone's attention to the Arrowhead meeting, which is at the beginning of October, I believe, which we obviously have a number of data readouts and presentations at medical meetings in September. The Arrowhead meeting is the one where we will really cover the breadth of the data across all of our Phase II program. And I think that will really form the basis that people will see as we take into the end of Phase II meeting.

And that's a medical meeting?

Medical meeting, San Diego.

Okay. And that's a neuro meeting. What exactly -- what type of meeting is it?

Yes, it's a pain meeting.

Excellent.

Great. All right. Thanks so much. Appreciate it, Yigal.

Thank you, Yigal.

Welcome to the Lexicon Pharmaceuticals Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, August 6, 2025.

I will now turn the call over to Lisa DeFrancesco, SVP, Investor Relations and Corporate Communications for Lexicon. Please go ahead, Lisa.

Thank you, Josh. Good morning, and welcome to our second quarter 2025 conference call.

Joining me today are Dr. Mike Exton, Lexicon's Chief Executive Officer and Director; Dr. Craig Granowitz, Senior Vice President and Chief Medical Officer; and Scott Coiante, Senior Vice President and Chief Financial Officer. This morning, Lexicon issued a press release announcing our financial results for the second quarter of 2025, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call, along with a slide presentation is also available on our website. During this call, we will review the information provided in the press 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 the safety, efficacy, clinical development, regulatory status and therapeutic and commercial potential of pilavapadin, LX9851, sotagliflozin and our other drug programs as well as our business generally. These statements may also include characterizations and projections relating to the clinical development, regulatory status and market opportunity for our drug programs and the commercial performance of INPEFA for heart failure.

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, and we refer you to our most recent annual report on Form 10-K and other SEC filings for detailed information describing such risks.

I would now like to turn the call over to Mike Exton. Mike?

Yes. Thank you, Lisa, and good day, everyone. Thanks for joining.

We're really excited to give you updates on the quarter and all of the great work going on at Lexicon. When we entered 2025, if you recall, we're still in the early days of our strategic pivot to being an R&D-focused company. And now in the second half of the year, I can say that this transformation has truly taken shape. We've made great strides against our objectives for the year across the board. We're now in a very strong position to advance our innovative portfolio of potential medicines. And I'm pleased to report that all of our lead R&D programs continue to be on track. We've made important progress against each of them in the second quarter, which I'd like to highlight briefly.

Pilavapadin, we've completed the secondary analysis of our Phase IIb progress results following the announcement of top line data in the first quarter. We're now in the process of analyzing the totality of Phase II data, which supports the broad potential for this novel mechanism while reengaging in discussions with potential partners with this additional data in hand.

Secondly, LX9851, our first-in-class candidate for the treatment of obesity, is on track to complete IND-enabling studies in 2025. So we look forward to continued collaboration with our licensee, Novo Nordisk.

For sotagliflozin, we've really hit the accelerator on our Phase III SONATA study in hypertrophic cardiomyopathy or HCM, which is the only Phase III HCM program enrolling currently, evaluating sota in both obstructive and nonobstructive subtypes of HCM. We've made excellent progress on site initiations globally, and Craig will elaborate on this shortly. Lastly, but importantly, we're also working closely with our licensee, Viatris, on expanding the reach of sotagliflozin in territories outside of the U.S. and EU, and we're making great progress on that front as well. So in summary, the team is hard at work, and it was an incredibly productive quarter for us that I'm very proud of.

Now before I turn the call over to Craig to talk in detail about the great progress in the pipeline, I want to take a moment to acknowledge a milestone. July marked 1 year since I joined as CEO of Lexicon. And as I reflect on all the changes that we've seen in that 12 months, I'm truly proud of the dedication and adaptability of this team. We successfully advanced multiple programs to late-stage development and beyond, and we look forward to reporting even more progress to come.

And on that note, I'd like Craig to give a more detailed update on our pipeline programs. So over to you, Craig.

Thanks, Mike.

I'll start by discussing pilavapadin. First quarter, we announced top line results of our Phase IIb progress study of pilavapadin in DPNP. DPNP is a chronic and progressive pain disorder that impacts approximately 30% of people with type 1 diabetes and up to 50% of those with type 2 diabetes. These patients experience burning pain, loss of sensation and other side effects that can severely impact their quality of life. Importantly, in both our Phase IIb PROGRESS study and our Phase IIa RELIEF study, pilavapadin 10 milligrams delivered consistent clinically meaningful reductions in these painful symptoms. Based on these data, we have concluded the 10-milligram dosage strength warrants further evaluation and is the appropriate dose to take forward into late-stage development.

We recently convened a scientific advisory board with expertise across clinical development, regulatory and neuropathic pain to review the full body of evidence for pilavapadin in DPNP. This esteemed group provided encouraging feedback and validated our key findings from the top line data readouts, including the following: first, the advisory board confirmed that pilavapadin demonstrates clinically meaningful efficacy. Second, they confirm the 10-milligram dose is the appropriate dose for future registrational studies. This gives us clarity on our path forward and validates the dose-finding work we've done to date.

Third, the board reaffirmed the safety and tolerability profile of the 10-milligram supports advancement into late-stage development. And finally, they provided validation and valuable input into Phase III study design, including suggestions to potentially lower the placebo response rate, which we believe could reduce potential study variability. The panel support gives us tremendous confidence as we prepare for our next steps and engage with potential partners for pilavapadin. It reinforces our belief that we have a potentially transformative therapy for the millions of patients living with this debilitating condition.

I also wanted to acknowledge that our analysis of the pilavapadin development program supports its compelling value proposition with a validated mechanism of action of AAK1, compelling clinical profile and broad potential applicability across multiple indications and demonstrates why we believe pilavapadin represents a true portfolio and a pill opportunity. Overall, beginning with efficacy, pilavapadin has demonstrated consistent and clinically meaningful pain reduction across 3 separate Phase II trials in neuropathic pain. While our lead indication in DPNP represents a mature clinical development program that is ready for Phase III advancement, several secondary indications such as spasticity are also Phase II ready, providing significant pipeline expansion opportunities.

In addition, our preclinical work has been extensive. We've completed IND-enabling studies across multiple neuroscience indications, both central and peripheral, establishing a broad foundation for further clinical development beyond our current focus areas. We've accumulated data from more than 600 patients treated with pilavapadin to date, demonstrating a suitable safety and tolerability profile. This extensive safety database will be valuable as the program moves into late-stage development and regulatory discussions. Finally, pilavapadin benefits from patent protection extending through 2040 when including an anticipated 5-year patent term extension. This provides substantial commercial exclusivity to maximize the value of our investment in this area.

Moving on to sotagliflozin in HCM. There are more than 1 million people with HCM in the United States. Of those, our previous research suggests approximately 1/3 have nonobstructive HCM and 2/3 have obstructive HCM, in which the thickening of the heart muscle wall blocks or reduces the blood flow to the heart. However, more recent technology, including a more sensitive diagnostic and AI-assisted tools suggest that the incidence of nonobstructive HCM could be much higher, potentially 50% or greater. This chronic progressive disease that can lead to more serious complications. 43% of patients with HCM have progressive heart failure and HCM can also lead to atrial fibrillation and stroke.

The medical community's understanding of how to diagnose and treat HCM has grown significantly in recent years as there are a number of innovations in development for HCM, including the approval of cardiac myosin inhibitors for obstructive HCM. However, despite substantial commercial investment and increased awareness of HCM, CMIs have only penetrated approximately 1% of the total HCM market. With this treatment landscape in mind, we believe sotagliflozin offers several unique advantages as a potential therapeutic option for HCM. First, it has a novel MOA as a dual mechanism SGLT1, SGLT2 inhibitor and is the only HCM agent under investigation that both -- that works both inside and outside the heart. This enables treated patients to potentially achieve symptom reduction while simultaneously targeting other outcomes such as heart failure and major adverse cardiovascular events where sotagliflozin has demonstrated benefits.

Second, as more data is generated, it is becoming increasingly clear that sotagliflozin is uniquely myocardially targeted. From a practical standpoint, the once-daily oral dosing profile facilitates broad clinical adoption, convenience and compliance. Importantly, this comes without the burden of a risk evaluation and mitigation strategies or REMS requirements that can complicate treatment. It is worth noting that sotagliflozin is already approved for heart failure. To date, we've observed no increased risk of atrial fibrillation, which is a critical consideration in this patient population. Looking forward, we're pursuing a broad proposed indication that encompasses both nonobstructive and obstructive HCM phenotypes. This positions sotagliflozin for potentially either use as monotherapy or in combination with other agents, providing clinicians with valuable flexibility in treatment planning.

We have amassed a wealth of data from studies confirming sota's mechanism of action in HCM and related conditions summarized here. Specifically, the animal models studied demonstrate sotagliflozin improves cardiac function and reduces wall thickness, left ventricular mass and fibrosis and cardiac inflammation, while the ex vivo models demonstrated the direct effects of sotagliflozin on the myocardium by reducing both stroke work and increasing metabolites associated with improved cardiac energetics. Collectively, these studies provide evidence that sota has a unique ability to work across multiple markers of the disease.

Now I want to spend some time talking through the clinical on -- the current ongoing clinical program, beginning with our own Phase III SONATA-HCM study of sotagliflozin in HCM. SONATA-HCM is a large global registration trial with a KCCQ primary endpoint designed to support a regulatory filing and broad label in HCM. SONATA-HCM is the only ongoing registrational trial currently evaluating a treatment in both obstructive and nonobstructive HCM. We have recently surpassed 100 sites initiated in 20 countries, including the U.S., Europe, Israel and Latin America, and we're well positioned to meet our goal of 130 sites actively enrolling patients by the end of the third quarter of 2025.

There are 2 important investigator-initiated studies underway that are designed to evaluate cardiac function of sotagliflozin in HCM. The first is SOTA-P-CARDIA being conducted by Dr. Juan Badimon and colleagues at the Mount Sinai School of Medicine in New York City. This study is designed to investigate the cardiorenal mechanistic benefits of sotagliflozin in 88 nondiabetic patients with HFpEF, which, as you recall, is a subset of HCM. It is a 6-month study comparing sotagliflozin 400 milligrams and placebo on the following endpoints: change in left ventricular mass, functional performance and quality of life measurements. This study was completed in July 2025, and the investigators are currently evaluating the data.

The second study I wanted to highlight is SOTA-CROSS, a 12-week crossover study funded by the NIH and being conducted by Dr. Sharlene Day at the Penn School of Medicine comparing sotagliflozin and placebo on exercise capacity, physical activity and symptoms and diastolic function in patients with symptomatic nonobstructive HCM. We already have shown that sota strongly improves diastole in FpEF. SOTA-CROSS will aim to specifically ascribe such functional benefits in non-HCM as well. Together with SONATA-HCM, this study could potentially be a major therapeutic advance for a large subset of patients who have limited treatment options.

Last but not least, we remain on track to complete the IND-enabling studies this year for LX9851, our first-in-class ACSL5 inhibitor for the treatment of obesity and related metabolic disorders. LX9851's oral administration, preclinical findings to date and possibility for both monotherapy and combination applications provides a compelling profile and the potential to occupy a unique space in the treatment landscape. And we look forward to working with our partner, Novo Nordisk, to maximize the potential of this innovative investigational medicine.

With that, Scott Coiante, our CFO, will now provide a report of our financial results for the second quarter.

Thank you, Craig, and good morning, everyone.

For the second quarter of 2025, we reported $28.9 million in revenue compared to $1.6 million for the second quarter of 2024. Q2 2025 revenue consisted primarily of $27.5 million of licensing revenue recognized from the Novo Nordisk agreement. As a reminder, we received the upfront payment of $45 million from Novo in April, which was initially recorded as deferred revenue and is being recognized as revenue throughout the remainder of 2025 as the IND-enabling work is completed. Total revenues for the quarter also include net product revenue of $1.3 million from sales of INPEFA.

Research and development expenses for the second quarter of 2025 decreased to $15.7 million from $17.6 million in 2Q 2024, primarily reflecting lower external research expense on our PROGRESS clinical trial study, partially offset by increased investment in our SONATA Phase III clinical study in HCM. Selling, general and administrative expenses for the second quarter of 2025 decreased to $9.4 million compared to $39.2 million in 2024. The decrease reflects lower costs as a result of our strategic repositioning announced in late 2024 and the significantly reduced marketing efforts in 2025 for INPEFA.

Net income for the second quarter of 2025 was $3.3 million or $0.01 per share as compared to a net loss of $53.4 million or $0.17 per share in the corresponding period in 2024. The net income for the quarter was primarily a result of the revenue recognized from the Novo Nordisk licensing agreement in Q2. We expect to recognize the remaining $17.5 million of licensing revenue from the Novo agreement in the second half of this year as the IND-enabling work is completed.

We ended the second quarter with $168 million in cash, short-term investments and restricted cash as compared to $238 million as of December 31, 2024.

In summarizing our financials, I would like to note a few highlights from the quarter. We've used the $45 million upfront payment received from the Novo licensing agreement to strengthen our balance sheet by reducing our long-term debt -- a portion of our long-term debt. On the expense side, we've made significant progress reducing our costs and streamlining our operations. Quarter-over-quarter operating expenses decreased by $31.9 million, primarily due to the strategic repositioning as an R&D-focused company announced late in 2024.

Reviewing our full year 2025 guidance, we're lowering our operating expense projections for the year. Total operating expenses are now expected to be in the range of $105 million to $115 million from $135 million to $145 million previously announced. R&D expenses are now projected to be in the range of $70 million to $75 million, down from a range of $100 million to $105 million, primarily as a result of the transfer of cost to Novo under our licensing agreement with them. SG&A expenses remain between $35 million and $40 million. Our R&D expense assumptions do not include costs associated with Phase III pivotal studies of pilavapadin as our goal will be to take this asset forward with a development partner.

Overall, we are in a strong position with the resources we need to advance our ongoing clinical programs while maintaining a disciplined approach to capital allocation and a focus on creating value for our shareholders.

Now I'll turn the call back to Mike for closing remarks.

Yes. Thanks, Scott and Craig.

Now as you... [Technical Difficulty]

Please stand by, your conference will resume momentarily.

Apologies for that brief interruption, when I'm getting to the punchline here. But look, let me go back and say that we've got lots of exciting updates in the second half of 2025. And clearly, as we've outlined, partnering is an essential part of how we plan to advance all of our assets. And on this slide, it really highlights the partnership strategy and action. Firstly, Viatris is making great progress and has recently received its first approval of sotagliflozin in the United Arab Emirates, which was a really short turnaround time and has also filed for regulatory approval in Saudi Arabia and is expecting to file for regulatory approval in Canada, Australia and New Zealand, Mexico and a number of Southeast Asian countries before the end of this year.

We aim to maximize the potential of LX9851 with our licensee, Novo Nordisk, a global expert in obesity and related conditions and partnership discussions are ongoing for pilavapadin, where we hope to collaborate with a high-quality partner to unlock the pipeline and appeal potential of this asset globally and across multiple indications. This flexible partnership strategy is intended to allow us to follow the science broadly, but really remain focused internally on our core cardiometabolic expertise. And so as you can see on this slide, we're exceptionally well positioned with a number of pipeline opportunities from our late-stage assets to our newest opportunities and whether organically or with a partner, we expect these programs to continue to add value and bring new innovation to patients over the longer term.

Now as we look further into 2025, we're excited about where Lexicon stands at this moment. Starting with pilavapadin, we're expecting full progress data to be presented in Q3. Also planning our end of Phase II meeting with timing to be dependent on our partnership discussions. Our preclinical work to broaden the value of this asset into additional indications continues. And additionally, a broad partnership for pilavapadin will allow us to become therapeutically focused on our core cardiometabolic programs and expertise.

For sota in HCM, our SONATA study is making excellent progress. Sites in the U.S., EU, Israel and LatAm are currently enrolling, and we expect all Phase III sites to be running by Q3. We also expect results from certain investigator-initiated studies of sota as early as Q4 of this year, which could provide valuable additional insights to the body of data on this therapeutic candidate. For INPEFA, Viatris is continuing to handle regulatory submissions and approvals outside the U.S. and EU. They've been really a fantastic partner, fully engaged and motivated. And we expect that these approvals will build significantly on the stabilized sales of INPEFA in the U.S., where my team is achieved by a strong mix of focused execution and innovation.

For Zynquista, the end-of-review evaluation process is underway. As you've no doubt seen, there's been an outpouring of patient support advocating for the approval of Zynquista in type 1 diabetes, and we're committed to pursuing all potential avenues for this program.

And last but not least, LX9851, our IND-enabling studies for obesity are progressing really, really well with a target completion by the end of the year. So if you look across this pipeline, any of these programs has the potential to transform patient lives and create significant value for Lexicon. But we believe that the simultaneous advancement of all 5 programs makes our position very compelling as we move through 2025, where we have a significant amount of opportunities for success.

And with that, we conclude our introductory remarks and turn it to you, operator, for some Q&A.

[Operator Instructions] Our first question comes from Yasmeen Rahimi with Piper Sandler.

This is Liam on for Yasmeen Rahimi. Great presentation this morning. We just were really impressed by the SOTA-CROSS trial that's upcoming with potential data in late 2026. So we're just wondering maybe if you can kind of walk us through, given the small sample size of the study, what are the doses being assessed and how much the inclusion/exclusion criteria resemble SONATA and kind of like in that vein, whether you expect to see like a static separation on the efficacy endpoint and also why an HCM was selected rather than an OHCM patient population?

Yes. Thank you, Liam, for the question. We're really excited about working with Dr. Day on this NIH-supported mechanistic trial. And I think the idea behind the NIH's interest in this was to continue to look at therapeutic options outside the CMIs that would be much more widely applicable and more readily implementable across the United States for this large unmet medical need. Nonobstructive HCM, I think, was also the target for the NIH grant because there are options available for obstructive. There are surgical options and now medical options, but there are no treatment options that have been approved for nonobstructive.

Relative small size of the study belies its significant power to accomplish its goals. By having a crossover design, you use the patient as their own control in the study. And the study has a number of important -- both imaging and physiologic outcomes. The inclusion criteria is very similar to that in the SONATA-HCM trial, which is a very broad cross-section of patients without diabetes who have a nonobstructive HCM. The only difference is that in SOTA-CROSS, there's not an allowance for patients on a CMI, but in SONATA-HCM, there actually is. So SONATA-HCM is even more broadly applicable.

We believe that if you look at all of the data together in its totality and what we've tried to do really as we think about life cycle management strategically is to look at the totality of the benefit of sotagliflozin, both mechanistically, imaging and clinically across the range of heart failure, MACE and HCM using different trials to look at different aspects. And one of the reasons we presented all 3 of SONATA-HCM, SOTA-CROSS and the SOTA-P-CARDIA study is that they are looking at different aspects of the physiology and clinical findings of patients with HFpEF and HCM.

Our next question comes from Andrew Tsai with Jefferies.

A couple of questions on pain. Recently, RFK Jr. mentioned how he wanted to promote the development of non-opioid pain drugs like Vertex's JOURNAVX. And so is there something you guys can do to take advantage of this new development? And could it, for instance, make sense to apply to the Commissioner's National Priority Voucher Program?

Yes. Thanks, Andrew. In fact, my team has been very actively engaged from a legislative perspective, particularly with the Alternatives to PAIN Act, which is the act that's supporting the use of non-opioid medications in chronic pain. And we've been really supporting the utility and the passing of that particular act. And we're seeing bipartisan support for this very important facet of the management of pain. In addition to that, like we have done with type 1 diabetes, it's also a patient advocacy groups that are very compelled to get new treatments.

And really, all of those things are just a factor for, I think, what is really a zeitgeist in the realization that particularly for chronic pain actually, even though there are new alternatives for acute pain, the real issue for non-opioid alternatives is -- lies within the realm of chronic use over many years where the addictive potential is clearly much more significant. And so we're very encouraged by the bipartisan enthusiasm in this area, and we think that as we progress pilavapadin into Phase III and then beyond, that this not only gives great support for continuing to develop pilavapadin, but importantly, once it achieves commercial reality, clearly, it provides a pathway for great access and ease of patients getting on to this non-opioid medication.

Right. And it sounds like you will have the FDA meeting by year-end now. And so in theory, in that meeting, to you guys, what would be the realistic "worst-case scenario" that can arise from that meeting?

Yes. Thank you, Andrew. It's Craig. I can answer your question. I mean, it actually is validating hearing other companies talk about what their pain program Phase III approaches in DPNP are. And as you recall, we have already met with the FDA on this program. And I think their feedback is going to be very similar to what we've already heard from them, and I think what other companies have also acknowledged is that you're going to need 2 parallel studies in the lead indication for neuropathic pain, and it is highly unlikely that with a single indication or a single study in 2 indications that you could get a broad neuropathic pain indication. That was always our expectation that was affirmed by the FDA, that was affirmed in our ad board, and I think it's been affirmed by other companies that are out there.

So when you think about the timing of our program and the magnitude of our program, I think it remains pretty much unchanged to what it was. It would be 2 parallel trials in DPNP, potentially with different geographies or slightly different designs, but primarily the same primary endpoint of neuro pain score at week 12. And I think based on all the data we've seen across the totality of our program, we think that the size of those studies to appropriately power them is very similar to what we've already been communicating to you of 2-arm studies of roughly 600 patients each with a single active arm and a placebo control arm.

Our next question comes from Caroline DePaul with Citi.

This is Caroline on for Yigal Nochomovitz. So we'd like to know what is Novo's plan for the Phase I in obesity? Are there plans to combine with GLP-1?

Yes. I think in our discussions with Novo, and I really want to thank our entire team for really having a great collaboration with Novo. I think as you've heard in the marketplace, and I think you've seen from both Lilly and Novo and other companies that the market is going to be moving towards oral options and combination options. And I think the data that we've already demonstrated and presented on the use of 9851 as an oral once-daily agent or the expectation of that, both with semaglutide and other agents that are being studied in development for weight loss and the potential for triple combinations. And I think you've seen other companies talking about moving both to oral and triple combinations. I think 9851 is really rightly positioned to be a part of that set of development programs.

If I could just provide one comment over the top of that. We've been really blessed with both of our partners with our licensees with Viatris and Novo Nordisk, the enthusiasm and capabilities that they bring to bear for both of these assets are really stellar. And although obviously, Novo is undergoing some changes at the moment, our engagement and interaction and their enthusiasm and drive for this asset is unbridled, so to speak. It's really incredible to see the team in action. And we expect that Novo will attack the Phase I program with vigor shortly after the IND.

Our next question comes from Joe Pantginis with H.C. Wainwright.

A couple, if you don't mind. First is a housekeeping question. With regard to the OpEx guidance, does this include or not include stock-based compensation?

It does include stock-based compensation.

Great. And then a couple of comments here that have been coming up about the end of Phase II meeting for pilavapadin. Just curious how you feel that, that's still on track, but more specifically, do you feel this is the ultimate rate-limiting step for your partnering plans?

I don't think it's a rate-limiting step, Joe. I think what has been our approach here is have the initial round of discussions with partners with the top line, helping them understand and now 2 important things have happened. We have, a, completed the secondary analyses from progress or 3 important things, I would say, completed the secondary analysis. We're bringing the totality of the Phase II program data to bear so that we understand the totality of evidence. And most importantly or perhaps most importantly, we've convened the scientific advisory board.

And we won't sort of go into who the people were, the members of that advisory board, but I can assure you, these are the top, top people that have been involved in this space from a regulatory development and mechanistic perspective for some time. And having their endorsement of as we theorized all along straight from the top line of 10 milligrams being the appropriate dose to move forward into Phase III really gives us confidence not only internally, but to reengage in those discussions and start to progress the discussions to a more concrete basis over the coming months. I think how we approach the end of Phase II meeting will be sort of dependent on now the engagement from partners around whether they want to be a part of that, whether they want to sort of see the outcome and move forward. But we're progressing that at speed.

Totally fair. And then just quickly on HCM. I don't know if Craig would want to give any color on this. I think it's been a pretty impressive ramp on the number of sites that you have. So just curious, as you're looking to really ramp up enrollment as well, are there any comments from the field with regard to views towards CMI or CMI competition for patients or what have you, even though you know you have a different profile of where sota might fit?

Yes. Great question, Joe. I'll answer that sort of in 2 very different ways. The first is we have this open window of enrollment. There are no active ongoing registrational trials now in HCM. And the fact that ODYSSEY ended in a sense without a long-term extension, there's a fair runoff period in that trial from what we understand, but those patients are also available with no treatment options. So we really have a nice golden opportunity here from an enrollment standpoint as we have a lot of sites with available patients that are symptomatic, both obstructive and nonobstructive whether they're on a CMI or not, that can be included in the trial. So in that regard, I think that's been a real upside.

The interesting aspect actually, when you think about enrollment, and I think this is what you're seeing already with some of the companies that are marketing products in obstructive HCM is there seems to be a speed limit in the capacity of the field to start new patients on CMIs because of the echoes. And while we do not require multiple echoes during treatment, unlike the CMI studies or CMIs themselves, we do require a baseline echo. So scheduling echo is an issue for enrollment, at least in the U.S. So it is interesting to see that flow through from the commercial market.

In the U.S., I would say the very early enrollment, and again, we're just looking at blinded data, but we know whether the patients are obstructive or nonobstructive, there are more nonobstructive patients being enrolled currently in the U.S. than obstructive, which is to be expected because one of the CMIs is already approved and on the market in the U.S. So there are no options available at all for the nonobstructive. So in the U.S., we're seeing more nonobstructive than obstructives, but we think that's going to rapidly shift ex U.S. because the CMIs are largely not available outside the U.S.

And Joe, what I hear over the last sort of 3 to 6 months speaking with KOLs, there's a couple of things. One, they're becoming more and more aware of sota in HCM. I think that's twofold. One, we're progressing SONATA and that enrollment is going nicely. And two, there's obviously been noise in the marketplace, particularly around nonobstructive and conjecture around will aficamten be successful, but they see because of some of the other evidence that we have with SONATA that this could be a real option for nonobstructive. So they're enthused about the possibility of that.

And then more broadly, sort of having worked in this space with Entresto and understanding that general cardiology practices across the country have HCM patients, have HFpEF patients and the potential to have one medicine that can potentially treat both very significantly without sort of fear nor favor and is really compelling beyond the academic sites into the general cardiology practices where, as you know, actually the vast majority of HCM patients are being treated.

[Operator Instructions] Our next question comes from Mazahir Alimohamed with Leerink Partners.

This is [indiscernible] on for Roanna. Just 2 from us. But I guess the first one is, given Vertex's recent announcement about their VX-993 and its inability to meet its primary endpoint in the Phase II, how does that, I guess, impact your confidence in the overall pain market and the ability to conduct a careful Phase III trial? And then I guess the second one, Craig, just a follow-up to what you just said. So I noticed that you mentioned that there's going to be an echo for every patient when they start the trial. Is that something that you would expect if approved as well? And to the market, would it be something that you would expect commercially that they would have an echo before being started on drug?

Yes. Great couple of questions, and please pass on our best regards to Roanna. I hope it's all going well with above. Let me take a first go with the pain question and Vertex. And obviously, we followed their earnings yesterday. I think, in fact, that gives us even greater confidence in our own program. Why is that? We've now shown 3 times in -- across Phase II programs in neuropathic pain that we can separate from placebo with the 10-milligram dose. We, I think, have always been a little bit skeptical of Nav 1.8, particularly in neuropathic pain. I think the evidence in acute pain despite 993's results yesterday in post bunionectomy not reading out positively.

So it allows us confidence in our program and having a novel mechanism of action compared to the number of companies that are now pursuing Navs, which really, the evidence is mixed, one would have to say apart from acute. But certainly, in neuropathic pain, the evidence is mixed at best. And actually, it's probably pretty much not great, so to speak. And it's one of those instances where being on a novel MOA with proven efficacy, really, we think, is something that we appreciate and gives us confidence moving forward. And importantly, our partners will appreciate as we sort of go back and have this next round of discussions.

So Craig, any other thoughts on that?

Yes, Mike, I think that was well said. I think just scientifically, there are a couple of important points. And again, I don't want to draw undue attention to another company's communications, but they did demonstrate or they communicated that with 993, they did get more exposure with more dose, and they had no additional efficacy. So I think that the question is there is certainly a healing on the effect of Nav 1.7 to mitigate pain. I think that's also reflective of the fact that they're looking at developing combinations of Nav 1.7 and 1.8, which presupposes that they're looking for more efficacy. So I think that's an important point.

And as Mike said, in neuropathic pain, the Navs have not demonstrated separation from placebo. They've demonstrated similar drops in pain score compared to pregabalin. But as we know, pregabalin doesn't always separate from placebo in the pregabalin registration trials, and that's the whole issue around placebo effect. So I think those are just a couple of additional comments. And I think it also reaffirms from a regulatory standpoint that you're going to need to do 2 separate trials in a pain indication to seek approval. And so again, I think those are some important findings that we had from what we heard the other day.

Switching gears on the echo. I don't think that's going to be a major impediment. All these patients are going to be getting an echo regardless. I think a lot of the issues in HCM, frankly, are related to the echoes because of the fact that CMIs reduce ejection fraction. So I think we don't have that issue, right? We're a drug that treats heart failure, whether you have low ejection fraction heart failure or normal ejection fraction heart failure. I think part of what's going on in the HCM field has been modified by the level of the agents and the fact that the current agents that have either been approved or under study actually have a negative ionotropic effect on the heart by their very design.

And because of that, getting an echo and following ejection fraction closely is a very important safety signal, which is the basis of the REMS that exist. So I think FDA will probably label our drug the way that we studied it, that there'll be an echo, but I think that the requirement or the necessity of the echo from a patient suitability standpoint might be less with sota, even though following the echo and following ejection fraction in patients with symptomatic heart failure is sort of standard of care today anyways, at least in the United States.

I would now like to turn the call back over to Mike Exton for any closing remarks.

Yes. Well, thanks very much for joining, everyone, and thanks for the questions, folks. I really appreciate those.

So I've done a number of these quarterly earnings calls since I've been here. And the last couple, we've had some major announcements with data readouts with a refocus on strategy and all of those have been very important announcements. But I think so far in my short tenure here, this is probably the quarter that I'm most proud of, mostly because of 2 things. One, that the team has really driven all programs in parallel to the point of their next stage of catalyst, to their next sort of inflection point, to their next natural development.

And importantly, we've done so in a way where we have really focused our resources and are allocating capital in a way that's really focused on adding value for us and all stakeholders. So both of those things have resulted in a quarter where the pipeline has advanced dramatically, and we've done so revising the outlook for expenses for the year, mostly because of 9851, but some of it due just to looking at all of our expenses and making sure we're spending wisely. So I couldn't be prouder of the team. Looking forward to Q3 as we go through a number of important developments over the next 3 months and updating you all then.

So thanks very much.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.