Lexicon Pharmaceuticals to lay off 60% of workforce after FDA setback
Updates shares, adds details in paragraphs 5-6, background in paragraphs 3,4 and 9
Nov 22 (Reuters) -Lexicon Pharmaceuticals LXRX.O said on Friday it would reduce its workforce by about 60%, after the U.S. Food and Drug Administration noted deficiencies in its application seeking approval for its diabetes drug.
A panel of advisers to the FDA had voted against recommending the drug, sotagliflozin, as an add-on treatment to insulin therapy for managing blood glucose levels in adults with type 1 diabetes and chronic kidney disease.
Sotagliflozin is an oral medicine that helps regulate blood glucose levels and reduces the risk of weight gain by inhibiting certain proteins.
The treatment, branded as Inpefa, was approved by the FDA last year as a broad treatment for heart failure, including in adult patients with type 2 diabetes.
Shares of the biopharma firm were down over 6% at 72 cents in premarket trading after the company said it will stop all planned commercial activities for sotagliflozin in type 1 diabetes.
However, the company said it will continue to manufacture and make Inpefa available to patients and existing prescribers.
Lexicon said it will eliminate its commercial field team and stop promotional efforts for Inpefa. Instead, the company plans to focus on development of its drug candidates for conditions such as obesity and nerve damage caused by diabetes, and is looking for partners to help make advancements.
As part of the restructuring, Lexicon aims to reduce operating costs by $100 million in 2025.
The company had 285 employees as of March 21, according to a regulatory filing. Lexicon said the reduction in workforce would be effective for most affected employees by Dec. 31.
Reporting by Mariam Sunny in Bengaluru; Editing by Shreya Biswas and Krishna Chandra Eluri
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