Why Lexicon Pharmaceuticals' Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biotechnology company Lexicon Pharmaceuticals (NAS: LXRX) jumped as much as 13% following the release of positive phase 2 clinical data on a key cancer drug.
So what: Lexicon's phase 2 trial for telotristat etripate, an oral drug aimed at treating carcinoid syndrome, a condition caused by metastatic carcinoid tumors that causes diarrhea and malnutrition, hit its primary efficacy endpoint. According to the data released today, patients experienced a 46.4% mean reduction from baseline over 12 weeks with basically no randomization being responsible for the results. Of the 15 patients tested, only one withdrew from the study, and that had nothing to do with the safety profile of the drug itself. Lexicon has already announced the move to a phase 3 study of telotristat etripate.
Now what: Before you get excited and invite your friends over for a party, keep in mind that this data includes an incredibly small sample size of 15 patients... fifteen! That's it! The data is encouraging, but I'm going to need to see how this translates into a larger patient profile before I'm sold on its efficacy. On the plus side, telotristat etripate does have both orphan drug status and fast track status, which should protect it from competing drugs for seven years if approved and allow it to work more closely with the FDA, which could facilitate bringing the drug to market quicker if phase 3 data proves as statistically meaningful as this phase 2 data did.
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