LXRX Stock Up as NVO Initiates Phase I Study of Partnered Obesity Drug

Shares of Lexicon Pharmaceuticals LXRX gained 5.1% on Monday after the company announced that its partner, Novo Nordisk NVO, a dominant player in the obesity market, has initiated an early-stage study of LX9851, a first-in-class, oral non-incretin development candidate.

The phase I study is evaluating the safety, tolerability, pharmacokinetics and pharmacodynamics of single and multiple ascending doses of LX9851 compared to placebo in 96 people with overweight or obesity. Study completion is expected in the first quarter of 2027.

LX9851 stands out for its novel mechanism of action. It is a potent, selective oral inhibitor of ACSL5, a key enzyme involved in pathways governing fat accumulation and energy balance. It may also trigger the ileal brake mechanism, promoting satiety by slowing gastric emptying and reducing appetite.

In preclinical in vivo studies, LX9851, when used alongside NVO’s blockbuster obesity drug Wegovy (semaglutide), led to greater reductions in body weight, food intake and fat mass compared to Wegovy alone. Additionally, the candidate helped limit weight regain and improved liver steatosis when administered after Wegovy discontinuation.

In early 2025, Lexicon Pharmaceuticals signed an exclusive license agreement with Novo Nordisk, granting the latter an exclusive, worldwide, royalty-bearing right and license to develop, manufacture and commercialize LX9851. LXRX received a $45 million upfront payment and a $10 million milestone payment from NVO as consideration for the agreement.

In the past six months, LXRX shares have gained 22.4% compared with the industry’s 14.4% growth.

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Under the agreement, Novo Nordisk will handle all regulatory, development and commercialization activities for LX9851. Lexicon Pharmaceuticals will supply the drug for clinical use at a pre-agreed transfer price for a defined period, after which Novo Nordisk will assume full responsibility for its manufacturing and supply.

Lexicon Pharmaceuticals has received a second $10 million milestone payment from Novo Nordisk in 2026, tied to initial dosing in the phase I study, and could earn an additional $10 million milestone later this year. Overall, LXRX stands to receive up to $1 billion in upfront and potential development, regulatory and sales-based milestones payments, along with tiered royalties on LX9851’s net sales.

Oral obesity therapies are expected to offer a more convenient and potentially lower-cost alternative to once-weekly injectables, reducing treatment burden and broadening patient uptake. Their ease of use may also support better long-term adherence.

Inpefa Anchors LXRX’s Portfolio as Pipeline Progresses

Lexicon Pharmaceuticals’ commercial portfolio has a marketed product, Inpefa (sotagliflozin), which is FDA-approved for heart failure. The company is also currently evaluating sotagliflozin in a pivotal phase III SONATA-HCM study for treating patients with obstructive or nonobstructive hypertrophic cardiomyopathy. Patient enrollment in the study is expected to be completed in mid-2026, with top-line results in the first quarter of 2027.

Lexicon Pharmaceuticals is also evaluating sotagliflozin (Zynquista), despite multiple earlier regulatory setbacks, for its use alongside insulin in adults with type I diabetes (T1D) and chronic kidney disease. Ongoing regulatory proceedings will determine whether approval can be denied. Meanwhile, the FDA has indicated that data from the ongoing third-party-funded, investigator-initiated STENO1 study in Denmark could support a future resubmission. LXRX is targeting a potential new drug application resubmission in 2026, contingent on meeting required safety and patient exposure criteria.

Apart from sotagliflozin, Lexicon Pharmaceuticals’ clinical pipeline also comprises another candidate, pilavapadin (LX9211), which is ready to enter late-stage development for treating diabetic peripheral neuropathic pain.

Lexicon Pharmaceuticals, Inc. Price and Consensus

Lexicon Pharmaceuticals, Inc. price-consensus-chart | Lexicon Pharmaceuticals, Inc. Quote

LXRX’s Zacks Rank & Stocks to Consider

Lexicon Pharmaceuticals currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Catalyst Pharmaceuticals CPRX and ADMA Biologics ADMA. While CPRX sports a Zacks Rank #1 (Strong Buy), ADMA carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for Catalyst Pharmaceuticals’ 2026 EPS have risen from $2.55 to $2.87. CPRX shares have gained 21.9% over the past six months.

Catalyst Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, with the average surprise being 35.19%.

Over the past 60 days, estimates for ADMA Biologics’ 2026 earnings per share (EPS) have increased from 85 cents to 96 cents. ADMA shares have lost 11.3% over the past six months.

ADMA Biologics’ earnings beat estimates in one of the trailing three quarters, matched once and missed on the remaining occasion, with the average negative surprise being 1.79%.

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