Wedbush Reiterates Outperform On Lexicon Following Funding Support From JDRF


In a research report released yesterday, Wedbush analyst Liana Moussatos reiterated an Outperform rating on Lexicon Pharmaceuticals (LXRX) with a $4 price target, following the news that the Juvenile Diabetes Research Foundation (JDRF) will provide funding to support Lexicon’s Phase II trial of LX4211 for the treatment of Type 1 diabetes.

Moussatos wrote, “Although we view JDRF’s support as a validation of the unmet need for T1DM and Lexicon’s preliminary Phase 2 results, we await disclosure about FDA guidance on a potential regulatory path for only T1DM. Currently, all diabetes drugs except insulin are approved for T2DM”.

Moussatos continued, “Type 2 and Type 1 diabetes. The company achieved stellar results in Phase 2 for Type 2 diabetes—with and without renal impairment–and plans to move into Phase 3 with a partner in H2 2014. In addition, Phase 2 results testing LX4211 treatment of Type 1 diabetes achieved positive results –reducing mealtime insulin and improved glycemic control. The recent positive result for renally-impaired type 2 diabetes differentiates LX4211 from the competition, in our view. If successful in the clinic and with regulatory approvals, we project gross peak worldwide sales of LX4211 could reach blockbuster status. With at least two potential significant drug candidates in mid- to late-stage clinical development and the ability to refill their pipeline with the integration of in-house medicinal chemistry and proprietary gene knockout platforms, we see Lexicon Pharmaceuticals as an attractive acquisition target”.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Liana Moussatos currently has a one-year average return of 51.4% and a 71% success rate. Moussatos has an average return of 7.6% when recommending LXRX, she is ranked #15 out of 3211 analysts.

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