Lexicon Pharmaceuticals’ 2026 Q2 Earnings Call: NHCM Trial Value and Zynquista NDA Timelines Clash

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $0.7 million for Q2 2026, compared to $28.9 million for Q2 2025
• EPS: Net loss of $0.01 per share for Q2 2026, compared to net income of $0.07 per share for Q2 2025

Guidance:

• Operating expenses for 2026 expected to be between $100 and $110 million.
• SG&A for 2026 anticipated to be between $37 and $42 million.
• R&D for 2026 projected to be between $63 and $68 million.
• NDA resubmission for Zynquista anticipated to occur during the fourth quarter of 2026.

Business Commentary:

Sotagliflozin in Hypertrophic Cardiomyopathy (HCM):

• Lexicon completed enrollment in the Sonata HCM Phase III trial, which is the largest to date in both obstructive and non-obstructive HCM, and the study was significantly over-enrolled.
• The completion of enrollment is a critical milestone that could lead to the announcement of top-line data in Q1 of the following year.
• The over-enrollment provides confidence in the study's power to evaluate the efficacy of sotagliflozin across the spectrum of symptomatic HCM.

Zynquista (Sotagliflozin) for Type 1 Diabetes:

• Lexicon is on the verge of completing the requirements for the resubmission of the New Drug Application (NDA) for Zynquista, with the Steno 1 study expected to meet the necessary exposure and DKA rate criteria by the end of August.
• The NDA resubmission could occur at the end of October 2026.
• The FDA's requirements were met through collaboration with the Steno Diabetes Center, ensuring adequate exposure and favorable DKA rates compared to previous trials.

Financial Performance and Strategic Investments:

• Lexicon reported revenues of $0.7 million for Q2 2026, compared to $28.9 million for the same period in 2025, primarily due to a decrease in net sales of MPEFA and licensing revenue.
• Research and development expenses increased to $17.4 million from $9.7 million in the prior year, driven by higher external costs for the Sonata HCM trial.
• The company strengthened its balance sheet with a $100 million debt facility and targeted investments in pre-commercial activities, focusing on medical education and market access.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed being 'thrilled' with over-enrollment in the Sonata HCM Phase III trial, 'pleased' with progress on Zynquista's NDA resubmission, and 'incredibly pleased' with financial accomplishments and strengthened balance sheet. They anticipate 'one of the most transformative' periods in the company's history.

Q&A:

• Question from Joanne Kim (Citigroup): On Sonata HCM, how should we think about the commercial and regulatory value of the patient mix (substantial majority non-obstructive vs. obstructive)? Is directionality across both phenotypes more important than exact magnitude?
  Response: The trial is powered on the overall population, giving confidence in observing the primary endpoint; there is opportunity across the disease spectrum, particularly in non-obstructive HCM where there are currently no approved agents.

• Question from Joanne Kim (Citigroup): What would constitute a supportive data package for Novo Nordisk to move LX9851 forward?
  Response: The bar for development is for Novo Nordisk to determine; the phase one trial is progressing well, and Novo is enthusiastic about the potential of this combination therapy in obesity.

• Question from Andrew Tsai (Jefferies): On type 1 diabetes, with NDA resubmission in Q4 and potential approval in mid-2027, can you discuss timing and any delay?
  Response: The delay is due to the time required to compile data from the investigator-initiated Steno 1 trial; the critical requirements (exposure and DKA rates) have been met, and submission could occur as early as end of October 2026.

• Question from Roana Ruiz (LeRank Partners): Could you share the proportion of patients on cardiac myosin inhibitors (CMIs) in the Sonata trial and how that might impact results and prescribing?
  Response: A fair number of patients were on CMIs, but availability was limited; patients on CMIs were still symptomatic, supporting the need for complementary treatments like Sotagliflozin.

• Question from Roana Ruiz (LeRank Partners): Where does Sotagliflozin fit into the HCM landscape, and how do you see prescribers making decisions?
  Response: Sotagliflozin is a complementary, oral, once-daily treatment with broad accessibility; it could be prescribed as a standalone or combination therapy, particularly as a first-line option for symptomatic HCM.

• Question from Yevmin Rahimi (Piper Sandler): Regarding the Sonata HCM trial, is there flexibility to adjust the statistical analysis plan based on top-line data, and how is the Steno 1 data being validated for the NDA?
  Response: There is some flexibility in the statistical plan hierarchy for secondary endpoints, but the primary endpoint remains unchanged; the Steno 1 data has been extensively reviewed for quality and format to meet FDA requirements.

Contradiction Point 1

Commercial and Regulatory Value of NHCM Cohort in Sonata HCM Trial

Contradiction on the primary importance of non-obstructive HCM patient numbers for trial success and regulatory approval.

Can you discuss Citigroup's earnings results? - Joanne Kim (Citigroup)

2026Q2: The trial was significantly over-enrolled and is representative of the real-world patient population. The primary analysis is powered for the overall population (both NHCM and OHCM combined)... The presence of a substantial NHCM cohort, where there are currently no approved treatments, is particularly valuable. - Craig Granowitz and Mike Exton

How should the mix of NHCM and OHCM patients in the Sonata HCM trial be evaluated in terms of commercial and regulatory value, and is directionality across both phenotypes more critical than the exact magnitude in each group? - Caroline (Citigroup)

2026Q1: The need is larger in the non-obstructive group since obstructive patients have existing therapy (CAMZYOS) available during the trial. - Dr. Craig Granowitz

Contradiction Point 2

Zynquista NDA Resubmission Timeline

Contradiction on the expected timeline for the Zynquista NDA resubmission, shifting from an implied 2026 focus to a specific October 2026 date with pending factors.

What are the key drivers of revenue growth this quarter? - Andrew Tsai (Jefferies)

2026Q2: The NDA resubmission is expected by the end of October 2026, pending final data formatting and FDA review. - Craig Granowitz and Mike Exton

What is the current timeline for the Zynquista (type 1 diabetes) NDA resubmission? - Yevmin Rahimi (Piper Sandler)

2026Q1: The team has reviewed electronic medical records, agreed on key variables, and ensured the data can be formatted for FDA submission. - Craig Granowitz and Mike Exton (implied progress towards submission, but no specific date given)

Contradiction Point 3

Zynquista (T1D) NDA Resubmission Timeline and Data Validation

Earlier confidence in a 2026 submission timeline conflicts with the current delay explanation tied to data collation from a study not designed for regulatory submission.

Andrew Tsai (Jefferies) - Andrew Tsai (Jefferies)

2026Q2: The delay is due to the time required to collate and format data from the investigator-initiated Steno 1 study, which was never designed for regulatory submission. - Craig Granowitz and Mike Exton

Could you provide an updated timeline and reassurance regarding the Zynquista NDA resubmission for type 1 diabetes? - Matthew Barcus (Jefferies LLC)

2025Q4: The FDA has indicated a 6-month review timeline for the NDA resubmission. The submission and potential approval are planned for 2026. - Michael Exton and Craig Granowitz

Contradiction Point 4

Commercial Model & Partnership Appetite for Sotagliflozin in HCM

Contradiction on the preferred commercialization strategy for a major asset, shifting from exploring various models to indicating a specific partnership is progressing.

Joanne Kim (Citigroup) - Joanne Kim (Citigroup)

2026Q2: Commercially, Sotagliflozin has potential across the entire HCM spectrum... The partnership is progressing as planned. - Mike Exton (referring to Novo Nordisk for LX9851, but incorrectly associated with Sotagliflozin)

How does the mix of NHCM and OHCM patients in the Sonata HCM trial impact commercial and regulatory value? - Joseph Pantginis (H.C. Wainwright)

2025Q3: Commercialization of Zynquista and SOTA in HCM will not follow the INPEFA model. As first-in-class assets, they will have better market access and pricing power. The commercial model is being explored, with options including a virtual sales force, hybrid models, co-promotion partnerships, or leveraging patient-driven advocacy channels. - Craig Granowitz and Michael Exton

Contradiction Point 5

Partnership Readiness for DPNP Program (Pilavapadin)

Contradiction on the timing for potential partnerships, shifting from engagements continuing into early 2026 to a partnership being progressing as planned without a specified timeline.

Joanne Kim (Citigroup) - Joanne Kim (Citigroup)

2026Q2: The bar for further development is now a question for Novo Nordisk. The Phase I trial is progressing well, and Novo is enthusiastic about the compound... The partnership is progressing as planned. - Mike Exton (referring to LX9851/obesity partnership)

What data is required for Novo Nordisk to advance LX9851 (ACSL5 inhibitor for obesity)? - Dominic (Piper Sandler)

2025Q3: Partnership engagements will continue after the End of Phase II meeting (minutes expected in early 2026) and into early 2026. - Michael Exton (referring to DPNP/pilavapadin)