Lexicon Pharmaceuticals is narrowing its strategic focus, directing its resources on its late-stage drug development programs, principally LX4211 for diabetes and telotristat etiprate (LX1032) for carcinoid syndrome, and preparation for the transition to commercialization.
As a result, approximately 115 employees, primarily in research, discovery and support positions, will leave, representing about 45% of the company's total workforce.
Lexicon will continue to meet its obligations to existing partners and expects to continue to progress its ongoing business development discussions, specifically including those relating to LX4211 for diabetes. Lexicon said this strategic focus increases its financial strength and positions the company for longer-term sustainable growth. Through the resulting staff reductions, Lexicon expects to reduce its expenses by approximately $14 million, net of severance and other costs, for the balance of 2014 and approximately $22 million on an annualized basis. As of Sept. 30, Lexicon had $151.2 million in cash and investments.
"This transition increases Lexicon's financial strength and will enable the company to more effectively advance our key late-stage programs and to prepare for commercialization," said Arthur T. Sands, M.D., Ph.D., Lexicon's president and chief executive officer. "Nevertheless, it is extremely difficult to release many people who have contributed so significantly to the company over the years and who are our friends and colleagues."
With the change in focus away from drug discovery and toward the completion of late-stage development and preparation for commercial operations, Sands also has indicated his intention to develop a succession plan with the board of directors to identify a new chief executive officer for the next phase of Lexicon's growth. The board of directors will be conducting a search for that position, and it is planned that Sands will continue as CEO until that process is complete.
"Since Lexicon's inception 20 years ago, I have been privileged to work with an exceptional team, founding and building a company that has evolved from fundamental genetics and chemistry to bring forth new drug candidates now in late-stage development," said Sands. "I look forward to continuing to actively lead the organization during this important period of transition as Lexicon continues to work toward the fulfillment of its mission to provide breakthrough therapies for patients."