Lexicon Pharmaceuticals, Inc. (LXRX) Accused of Issuing Materially False Statements

According to the complaint, Lexicon Pharmaceuticals, Inc. (LXRX) entered into a collaboration and license agreement with Sanofi for Sotagliflozin, also known as "Zynquista", in November 2015. For nearly three years since, Lexicon repeatedly touted the benefits of Sotagliflozin by highlighting the benefits of eventual commercialization and its positive Phase 3 clinical trial results. It failed to convey the import of the various adverse events suffered by the trial's participants and how such data might impact Sotagliflozin's review by the FDA. In May 2018, Sanofi filed a New Drug Application based on data from Lexicon's clinical trials assessing the drug's safety and efficacy. In January 2019, the Advisory Committee met to vote. The FDA's briefing document on Sotagliflozin found, amongst other concerns, troubling data regarding the risk of diabetic ketoacidosis. As a result, the vote ended in a stalemate. On this news, Lexicon's stock price fell $1.74 per share, or 22.6%, to close at $5.96 per share on January 18, 2019.

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