The FDA's Upcoming Decision On Zynquista Is Key To Lexicon's Performance

Lexicon Pharmaceuticals (LXRX) has long been a volatile stock, even by the standards of biotech, and whether it can move out of its current doldrums has everything to do with next week’s FDA decision on Zynquista for Type 1 diabetes (or T1D). With Xermelo relegated to an “is what it is” disappointment in carcinoid-related diarrhea and other clinical candidates in early stages of development, Zynquista is the key value-driver now.

I’m still guardedly optimistic that the FDA will approve Zynquista, albeit with warnings and risk mitigation strategies, but I don’t exclude the possibility of a rejection on procedural grounds or a requirement for a risk mitigation study. Still, with what I regard as overly-discounted expectations for Zynquista in both T1D and Type 2 diabetes (or T2D), these shares still look undervalued, albeit very risky, to me.

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