All in all, it's been a good year for Lexicon Pharmaceuticals (LXRX). Although well off its highs, the stock has done well since I last wrote about its prospects and the company looks to be in stronger shape today. The real question for Lexicon, though, is whether the company can produce clinical data that significantly differentiates its candidates from rival therapies and gives larger pharmaceutical companies a reason to partner with the company.

Diabetes Drives The Bus

Far and away the most important drug to Lexicon is LX4211 - the company's proprietary SGLT-1/SGLT-2 inhibitor. SGLT inhibition has become a hot area for diabetes drug development, but Lexicon has the only dual inhibitor well into studies.

Phase II results looked encouraging. About six weeks ago, Lexicon reported that LX4211 showed a 0.95% HbA1c reduction when given in the highest dose. There was also a strong link between dose and efficacy (usually a good sign that a drug does something), as lower dosages showed reductions of 0.79%, 0.52%, and 0.43%. Safety looked good; although 22% of patients in the high-dosage group had various GI issues, these are not uncommon issues with diabetes drugs and the rate of discontinuations was quite low.

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