Markets don't buy Lexicon's Zynquista claims

Snippets

Lexicon’s stock fell off a cliff on Monday after Sanofi said it was terminating a deal covering its diabetes drug Zynquista, a move Lexicon claims is a breach of contract. Lexicon’s attempts to reassure investors did not help: the company was down another 14% this morning despite its latest claim that Sanofi is on the hook for the next 12 months' clinical trial costs in type 2 diabetes. Though the SEC filing at the time of the companies' deal makes no mention of a 12-month notice period, on a second-quarter earnings call Lexicon's chief executive, Lonnel Coats, said this funding obligation was "not in dispute"; Sanofi had not confirmed this to Vantage, at the time of publication. 12 months' funding could take Lexicon to remaining core phase III readouts, as well as US and EU submissions, although the fate of a cardiovascular outcomes study is less clear. The chief exec also said Sanofi’s decision had been triggered by data from three type 2 diabetes trials released last week, suggesting that a safety issue seen in type 1 disease had not been a factor, but added that Sanofi’s recent refocus, which does not include diabetes, might be the real reason.

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