Cover Page
Cover Page - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 06, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 000-30111 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 76-0474169 | ||
Entity Address, Address Line One | 8800 Technology Forest Place | ||
City Area Code | (281) | ||
Local Phone Number | 863-3000 | ||
Entity Address, City or Town | The Woodlands | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77381 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 259,500 | ||
Documents Incorporated by Reference | Certain sections of the registrant’s definitive proxy statement relating to the registrant’s 2020 annual meeting of stockholders, which proxy statement will be filed under the Securities Exchange Act of 1934 within 120 days of the end of the registrant’s fiscal year ended December 31, 2019, are incorporated by reference into Part III of this annual report on Form 10-K. | ||
Entity Registrant Name | Lexicon Pharmaceuticals, Inc. | ||
Entity Central Index Key | 0001062822 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Trading Symbol | LXRX | ||
Entity Common Stock, Shares Outstanding | 106,969,973 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets, Current [Abstract] | ||
Cash and cash equivalents | $ 36,112 | $ 80,386 |
Short-term investments | 235,547 | 79,666 |
Accounts receivable, net of allowances of $4 | 56,532 | 5,924 |
Inventory | 4,243 | 4,680 |
Prepaid expenses and other current assets | 5,320 | 2,668 |
Total current assets | 337,754 | 173,324 |
Property and equipment, net of accumulated depreciation and amortization of $61,741 and $60,006, respectively | 14,047 | 15,865 |
Goodwill | 44,543 | 44,543 |
Intangible assets | 19,716 | 50,119 |
Other assets | 1,655 | 285 |
Total assets | 417,715 | 284,136 |
Liabilities, Current [Abstract] | ||
Accounts payable | 12,178 | 12,052 |
Accrued liabilities | 42,151 | 21,245 |
Current portion of deferred revenue | 0 | 2,339 |
Current portion of long-term debt, net of deferred financing costs | 11,012 | 1,115 |
Total current liabilities | 65,341 | 36,751 |
Deferred revenue, net of current portion | 0 | 23,651 |
Long-term debt, net of deferred financing costs | 234,171 | 243,887 |
Deferred tax liabilities | 0 | 6,014 |
Other long-term liabilities | 1,102 | 238 |
Total liabilities | 300,614 | 310,541 |
Commitments and contingencies | ||
Stockholders' Equity (Deficit): | ||
Preferred stock, $.01 par value; 5,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $.001 par value; 225,000 shares authorized; 106,679 and 106,162 shares issued, respectively | 106 | 106 |
Additional paid-in capital | 1,462,172 | 1,447,954 |
Accumulated deficit | (1,341,444) | (1,471,577) |
Accumulated other comprehensive gain (loss) | 84 | (12) |
Treasury stock, at cost, 407 and 236 shares, respectively | (3,817) | (2,876) |
Total stockholders' equity (deficit) | 117,101 | (26,405) |
Total liabilities and equity (deficit) | $ 417,715 | $ 284,136 |
Balance Sheet Parentheticals
Balance Sheet Parentheticals - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for doubtful accounts receivable | $ 4 | $ 4 |
Accumulated depreciation and amortization, property and equipment | $ 61,741 | $ 60,006 |
Preferred stock, par value per share (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 225,000 | 225,000 |
Treasury stock, shares | 407 | 236 |
Common Stock | ||
Common stock, shares issued | 106,679 | 106,162 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Net product revenue | $ 32,331 | $ 26,583 | $ 15,890 |
Collaborative agreements | 289,231 | 36,271 | 75,621 |
Royalties and other revenue | 511 | 355 | 178 |
Total revenues | 322,073 | 63,209 | 91,689 |
Operating expenses: | |||
Cost of sales (including finite-lived intangible asset amortization) | 3,231 | 2,491 | 1,899 |
Research and development, including stock-based compensation of $7,096, $6,010, and $4,905, respectively | 91,924 | 100,243 | 152,223 |
Increase in fair value of Symphony Icon, Inc. purchase liability | 0 | 0 | 2,101 |
General and administrative, including stock-based compensation of $7,122, $5,686, and $4,567, respectively | 56,835 | 63,754 | 66,090 |
Total operating expenses | 180,628 | 166,488 | 222,313 |
Income (loss) from operations | 141,445 | (103,279) | (130,624) |
Interest expense | (20,676) | (20,777) | (6,984) |
Interest and other income, net | 3,350 | 3,508 | 1,954 |
Net income (loss) before taxes | 124,119 | (120,548) | (135,654) |
Income tax benefit | 6,014 | 0 | 12,661 |
Net income (loss) | 130,133 | (120,548) | (122,993) |
Other comprehensive loss: | |||
Unrealized gain (loss) on investments | 96 | 210 | (27) |
Comprehensive loss | $ 130,229 | $ (120,338) | $ (123,020) |
Earnings Per Share, Basic | $ 1.23 | $ (1.14) | $ (1.17) |
Earnings Per Share, Diluted | $ 1.16 | $ (1.14) | $ (1.17) |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 28,638 | $ 0 | $ 0 |
Weighted Average Number of Shares Outstanding, Diluted | 116,747 | 105,830 | 105,237 |
Weighted Average Number of Shares Issued, Basic | 106,218 | 105,830 | 105,237 |
Statements of Comprehensive Los
Statements of Comprehensive Loss Parentheticals (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-based compensation expense associated with research and development expense | $ 7,096 | $ 6,010 | $ 4,905 |
Stock-based compensation expense associated with general and administrative expense | $ 7,122 | $ 5,686 | $ 4,567 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Treasury Stock |
Balance, shares at Dec. 31, 2016 | 104,582 | |||||
Balance, value at Dec. 31, 2016 | $ 167,507 | $ 105 | $ 1,411,222 | $ (1,240,257) | $ (195) | $ (3,368) |
Stock-based compensation | 9,472 | $ 0 | 9,472 | 0 | 0 | 0 |
Issuance of common stock to designees of Symphony Icon Holdings LLC, value | 10,499 | |||||
Issuance of common stock under Equity Incentive Plans, shares | 469 | |||||
Issuance of common stock under Equity Incentive Plans, value | 5,486 | $ 1 | 5,485 | 0 | 0 | 0 |
Repurchase of common stock | (1,679) | 0 | 0 | 0 | 0 | 1,679 |
Net loss | (122,993) | 0 | 0 | (122,993) | 0 | 0 |
Unrealized gain (loss) on investments | (27) | $ 0 | 0 | 0 | (27) | 0 |
Balance, shares at Dec. 31, 2017 | 105,711 | |||||
Balance, value at Dec. 31, 2017 | 68,265 | $ 106 | 1,435,526 | (1,365,241) | (222) | (1,904) |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 14,212 | 0 | 14,212 | 0 | 0 | |
Stock-based compensation | 11,696 | $ 0 | 11,696 | 0 | 0 | 0 |
Symphony Contingent Payment In Cash | 0 | |||||
Issuance of common stock under Equity Incentive Plans, shares | 451 | |||||
Issuance of common stock under Equity Incentive Plans, value | 732 | $ 0 | 732 | 0 | 0 | 0 |
Repurchase of common stock | (972) | 0 | 0 | 0 | 0 | (972) |
Net loss | (120,548) | 0 | 0 | (120,548) | 0 | 0 |
Unrealized gain (loss) on investments | 210 | $ 0 | 0 | 0 | 210 | 0 |
Balance, shares at Dec. 31, 2018 | 106,162 | |||||
Balance, value at Dec. 31, 2018 | (26,405) | $ 106 | 1,447,954 | (1,471,577) | (12) | (2,876) |
Stock-based compensation | 14,218 | $ 0 | 14,218 | 0 | 0 | 0 |
Issuance of common stock to designees of Symphony Icon Holdings LLC, value | 0 | |||||
Issuance of common stock under Equity Incentive Plans, shares | 517 | |||||
Issuance of common stock under Equity Incentive Plans, value | 0 | $ 0 | 0 | 0 | 0 | 0 |
Repurchase of common stock | (941) | 0 | 0 | 0 | 0 | (941) |
Net loss | 130,133 | 0 | 0 | 130,133 | 0 | 0 |
Unrealized gain (loss) on investments | 96 | $ 0 | 0 | 0 | 96 | 0 |
Balance, shares at Dec. 31, 2019 | 106,679 | |||||
Balance, value at Dec. 31, 2019 | $ 117,101 | $ 106 | $ 1,462,172 | $ (1,341,444) | $ 84 | $ (3,817) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net loss | $ 130,133 | $ (120,548) | $ (122,993) |
Adjustments to reconcile consolidated net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 3,654 | 3,683 | 3,399 |
Increase in fair value of Symphony Icon, Inc. purchase liability | 0 | 0 | 2,101 |
Stock-based compensation | 14,218 | 11,696 | 9,472 |
Loss on disposal of property and equipment | 0 | 0 | 3 |
Amortization of debt issuance costs | 1,465 | 1,336 | 599 |
Deferred tax benefit | (6,014) | 0 | (12,661) |
Changes in operating assets and liabilities: | |||
(Increase) decrease in accounts receivable | (50,608) | (1,099) | 166 |
Increase in inventories | 437 | (2,732) | (1,948) |
(Increase) decrease in prepaid expenses and other current assets | (2,652) | 1,766 | (557) |
(Increase) decrease in other assets | 429 | 144 | 33 |
Increase (decrease) in accounts payable and other liabilities | 20,097 | (19,913) | (11,875) |
Decrease in deferred revenue | (25,990) | (22,940) | (51,133) |
Net cash used in operating activities | 113,807 | (148,607) | (185,394) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (70) | (95) | (228) |
Purchases of investments | (322,385) | (119,987) | (267,873) |
Maturities of investments | 166,600 | 289,658 | 318,623 |
Net cash provided by investing activities | (155,855) | 169,576 | 50,522 |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock, net of fees | 0 | 732 | 7,987 |
Repurchase of common stock | (941) | (972) | (1,679) |
Proceeds from debt borrowings, net of fees | 0 | 12,529 | 145,905 |
Repayment of debt borrowings | (1,285) | (14,533) | (2,280) |
Net cash provided by (used in) financing activities | (2,226) | (2,244) | 149,933 |
Net increase (decrease) in cash and cash equivalents | (44,274) | 18,725 | 15,061 |
Cash and cash equivalents at beginning of year | 80,386 | 61,661 | 46,600 |
Cash and cash equivalents at end of year | 36,112 | 80,386 | 61,661 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 19,211 | 16,465 | 5,870 |
Supplemental disclosure of noncash investing and financing activities: | |||
Common stock issued in satisfaction of Symphony Icon base payment obligation | $ 0 | $ 10,499 | |
Symphony Contingent Payment In Cash | $ 0 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2019 | |
Organization and Operations [Abstract] | |
Organization and Operations | Organization and Operations Lexicon Pharmaceuticals, Inc. (“Lexicon” or the “Company”) is a Delaware corporation incorporated on July 7, 1995. Lexicon was organized to discover the functions and pharmaceutical utility of genes and use those gene function discoveries in the discovery and development of pharmaceutical products for the treatment of human disease. Lexicon has financed its operations from inception primarily through sales of common and preferred stock, contract and milestone payments to it under strategic collaborations and other research and development collaborations, target validation, database subscription and technology license agreements, product sales, government grants and contracts and financing under debt and lease arrangements. The Company’s future success is dependent upon many factors, including, but not limited to, its ability to successfully commercialize XERMELO in the United States and the amount of revenues generated from such commercialization efforts; Ipsen Pharma SAS’s (“Ipsen”) ability to successfully commercialize XERMELO outside of the United States and Japan and Lexicon’s receipt of any milestone payments and royalties; the success of its ongoing nonclinical and clinical development efforts and ability to obtain necessary regulatory approvals of the drug candidates which are the subject of such efforts; its success in establishing new collaborations and licenses, including for the development and commercialization of sotagliflozin; general and industry-specific economic conditions which may affect research and development expenditures; and its ability to obtain and enforce patents and other proprietary rights in its discoveries, comply with federal and state regulations, and maintain sufficient capital to fund its activities. As a result of the aforementioned factors and the related uncertainties, there can be no assurance of the Company’s future success. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation: The accompanying consolidated financial statements include the accounts of Lexicon and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation. In 2018, accounts payable included $5.7 million related to its accrual for clinical studies. The Company has reclassified this amount to accrued liabilities in the consolidated balance sheet for comparable presentation of accounts payable and accrued liabilities. Use of Estimates: The preparation of financial statements in conformity with U. S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Cash, Cash Equivalents and Short-Term Investments: Lexicon considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. As of December 31, 2019 and December 31, 2018, short-term investments consist of U.S. treasury bills and corporate debt securities. The Company’s short-term investments are classified as available-for-sale securities and are carried at fair value, based on quoted market prices of the securities. The Company views its available-for-sale securities as available for use in current operations regardless of the stated maturity date of the security. Unrealized gains and losses on such securities are reported as a separate component of stockholders’ equity. Net realized gains and losses, interest and dividends are included in interest income. The cost of securities sold is based on the specific identification method. Accounts Receivable: Lexicon records trade accounts receivable in the normal course of business related to the sale of products or services. The allowance for doubtful accounts takes into consideration such factors as historical write-offs, the economic climate and other factors that could affect collectibility. Write-offs are evaluated on a case by case basis. Inventory: Inventories are determined at the lower of cost or market value with cost determined under the specific identification method and may consist of raw materials, work in process and finished goods. Inventory consisted of the following as of December 31, 2019 and 2018 (in thousands): As of December 31, 2019 2018 Raw materials $ 3,182 $ 3,564 Work-in-process 153 232 Finished goods 908 884 Total inventory $ 4,243 $ 4,680 Concentration of Credit Risk: Lexicon’s cash equivalents, investments and accounts receivable represent potential concentrations of credit risk. The Company attempts to minimize potential concentrations of risk in cash equivalents and investments by placing investments in high-quality financial instruments. The Company’s accounts receivable are unsecured and are concentrated in pharmaceutical and biotechnology companies located in Europe and the United States. The Company has not experienced any significant credit losses to date. In 2019, customers in Germany and the United States represented 89% and 10% of revenue, respectively. In 2018, customers in Germany and the United States represented 53% and 40%, respectively. In 2017, customers in Germany, France and the United States represented 65%, 18% and 17% of revenue, respectively. At December 31, 2019, management believes that the Company has no significant concentrations of credit risk. Segment Information and Significant Customers: Lexicon operates in one business segment, which primarily focuses on the discovery, development and commercialization of pharmaceutical products for the treatment of human disease. Substantially all of the Company’s revenues have been derived from drug discovery alliances, target validation collaborations for the development and, in some cases, analysis of the physiological effects of genes altered in knockout mice, technology licenses, subscriptions to its databases, product sales, government grants and contracts and compound library sales. In 2019, Sanofi-Aventis Deutschland GmbH (“Sanofi”) represented 89% of revenues and no other individual customer represented more than 10% of revenues. In 2018, Sanofi represented 53% of revenues and two independent specialty pharmacies, Biologics, Inc. and Diplomate Pharmacy, represented 25% and 14% of revenues, respectively. In 2017, Sanofi and Ipsen represented 65% and 18% of revenues, respectively. Intangible Assets: Intangible assets, net consist of in-process research and development acquired in business combinations, which are reported at fair value, less accumulated amortization. Intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives. During 2017, intangible assets relating to XERMELO of $24.7 million were reclassified from indefinite-lived to finite-lived assets following the approval of XERMELO by the FDA. The Company has recorded $1.8 million in amortization expense related to this asset in each of the years ended December 31, 2019 and 2018, respectively, and $1.5 million for the year ended December 31, 2017. Amortization expense is recorded as cost of sales in the accompanying consolidated statements of comprehensive income (loss). Estimated future amortization expense for intangible assets as of December 31, 2019 is as follows: For the Year Ending (in thousands) 2020 $ 1,766 2021 1,766 2022 1,766 2023 1,766 2024 1,766 Thereafter 10,886 $ 19,716 Property and Equipment: Property and equipment that is held and used is carried at cost and depreciated using the straight-line method over the estimated useful life of the assets which ranges from three Impairment of Long-Lived Assets: Long-lived assets, right-of-use assets for leases and finite-lived intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount that the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no impairments of long-lived assets, including finite-lived intangible assets, in 2019, 2018 or 2017. Indefinite-lived intangible assets are also tested annually for impairment and whenever indicators of impairment are present. When performing the impairment assessment, the Company first assesses qualitative factors to determine whether it is necessary to recalculate the fair value of its intangible assets. If management believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the intangible assets is less than its carrying amount, the Company calculates the asset’s fair value. If the carrying value of the asset exceeds its fair value, then the intangible asset is written down to its fair value. Lexicon determined that a triggering event occurred upon execution of the Termination Agreement with Sanofi (as defined in Note 13) and Lexicon's resulting decision to substantially reallocate resources from the development of certain programs, including LX1031 and LX1033 for irritable bowel syndrome, to the development of sotagliflozin. In connection with such triggering event, Lexicon determined that its LX1031 and LX1033 programs for irritable bowel syndrome, collectively an intangible asset, were considered to be impaired and recorded an impairment charge of $28.6 million to IPR&D for the year ended December 31, 2019. The impairment reduced the remaining book value to zero. There were no impairments of indefinite-lived intangible assets in 2018 or 2017. Goodwill Impairment: Goodwill is not amortized, but is tested at least annually for impairment at the reporting unit level. The Company has determined that the reporting unit is the single operating segment disclosed in its current financial statements. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The first step in the impairment process is to determine the fair value of the reporting unit and then compare it to the carrying value, including goodwill. If the fair value exceeds the carrying value, no further action is required and no impairment loss is recognized. Additional impairment assessments may be performed on an interim basis if the Company encounters events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. There was no impairment of goodwill in 2019, 2018 or 2017. Revenue Recognition: Product Revenues Product revenues consist of commercial sales of XERMELO in the United States and sales of bulk tablets of XERMELO to Ipsen. Product revenues are recognized when the customer obtains control of the Company’s product, which occurs upon delivery to the customer. The Company recognizes product revenue net of applicable reserves for variable consideration, including allowances for customer credits, estimated rebates, chargebacks, discounts, returns, distribution service fees, and government rebates, such as Medicare Part D coverage gap reimbursements in the United States, as discussed below. These estimates are based on the most likely amount method for relevant factors such as current contractual and statutory requirements, industry data and forecasted customer buying and payment patterns. Product shipping and handling costs are considered a fulfillment activity when control transfers to the Company’s customers and such costs are included in cost of sales. Customer Credits: The Company’s customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts. The Company expects that its customers will earn prompt payment discounts. As a result, the Company deducts the full amount of those discounts from total product sales when revenues are recognized. Service fees are also deducted from product sales as they are earned. Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program. Rebate amounts are based upon contractual agreements or legal requirements with public sector (e.g., Medicaid) benefit providers. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements or legal requirements with public sector benefit providers. The allowance for rebates is based on statutory discount rates and expected utilization. The Company’s estimates for expected utilization of rebates are based on third party market research data and data received from the specialty pharmacies. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known unpaid rebates from the prior quarter. If actual future rebates vary from estimates, the Company may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Chargebacks: Chargebacks are discounts that occur when contracted customers purchase directly from a specialty pharmacy or distributor, who acts as a retailer. Contracted customers, which currently consist primarily of Public Health Service Institutions, non-profit clinics, and federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The specialty pharmacy or distributor, in turn, charges back to Lexicon the difference between the price paid by the specialty pharmacy or distributor and the discounted price paid to the specialty pharmacy or distributor by the customer. The allowance for chargeback is based on known sales to contracted customers. Medicare Part D Coverage Gap: The Medicare Part D prescription drug benefit mandates manufacturers to fund a portion of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. The Company’s estimates for the expected Medicare Part D coverage gap are based on data received from the specialty pharmacies and projections based on historical data. Funding of the coverage gap is generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters. If actual future funding varies from estimates, the Company may need to adjust prior period accruals, which would affect revenues in the period of adjustment. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. Collaborative Agreements The Company adopted ASU NO. 2014-09, “Revenue from Contracts with Customers”, on January 1, 2018, using the modified retrospective method. In its adoption, the Company recorded a $14.2 million cumulative-effect adjustment to its accumulated deficit related to a contract with the Texas Institute for Genomic Medicine. Subsequent to adoption, the Company was notified that all performance obligations related to the contract have been fulfilled. Revenues under collaborative agreements include both license revenue and contract research revenue. The Company performs the following five steps in determining the amount of revenue to recognize as it fulfills its performance obligations under each of its agreements: (i) identify the contract(s) with a customer; (ii) identify the performance obligation in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company applies this five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company develops assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. At contract inception, the Company evaluates whether development milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal will not occur, the associated development milestone value is included in the transaction price. Development milestones that are not within the control of the Company or the licensee, including those requiring regulatory approval, are not considered probable of being achieved until those approvals are received. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue when (or as) the performance obligation is satisfied. At the end of each reporting period, the Company re-evaluates the probability of achievement of the development milestones and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenues in the period of adjustment. In agreements in which a license to the Company’s intellectual property is determined distinct from other performance obligations identified in the agreement, the Company recognizes revenue when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For agreements that include sales-based royalties, including milestones based on a level of sales, the license is deemed to be the predominant item to which the royalties relate and the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The Company may receive payments from its licensees based on billing schedules established in each contract. Upfront payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these agreements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. Cost of Sales: Cost of sales consists of third-party manufacturing costs, freight and indirect overhead costs associated with sales of XERMELO. The Company began capitalizing inventory during 2017 once the FDA approved XERMELO as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to approval of XERMELO have been recorded as research and development expense in the consolidated statements of comprehensive income (loss). As a result, cost of sales for approximately the next twelve months will reflect a lower average per unit cost of materials. Product shipping and handling costs are included in cost of sales. Cost of sales also includes the amortization of the intangible asset for XERMELO using the straight-line method over the estimated useful life of 14 years. Research and Development Expenses: Research and development expenses consist of costs incurred for company-sponsored as well as collaborative research and development activities. These costs include direct and research-related overhead expenses and are expensed as incurred. Technology license fees for technologies that are utilized in research and development and have no alternative future use are expensed when incurred. Substantial portions of the Company’s preclinical and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors. For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled and the duration of the study. The Company's estimates of the clinical study costs and costs to transition activities from Sanofi for development of sotagliflozin for type 2 diabetes, heart failure and chronic kidney disease was based on estimates of the services to be received and efforts to be expended pursuant to contracts with multiple vendors and the CRO that will conduct and manage the clinical studies on its behalf. The Company monitors patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to the Company by the vendors and clinical site visits. The Company’s estimates depend on the timeliness and accuracy of the data provided by the vendors regarding the status of each program and total program spending. The Company periodically evaluates the estimates to determine if adjustments are necessary or appropriate based on information it receives. Stock-Based Compensation: The Company recognizes compensation expense in its statements of comprehensive income (loss) for share-based payments, including stock options and restricted stock units issued to employees, based on their fair values on the date of the grant, with the compensation expense recognized over the period in which an employee is required to provide service in exchange for the stock award. Stock-based compensation expense for awards without performance conditions is recognized on a straight-line basis. Stock-based compensation expense for awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the time the applicable condition is met. As of December 31, 2019, stock-based compensation cost for all outstanding unvested options and restricted stock units was $24.0 million, which is expected to be recognized over a weighted-average period of 1.1 years. The fair value of stock options is estimated at the date of grant using the Black-Scholes method. The Black-Scholes option-pricing model requires the input of subjective assumptions. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. For purposes of determining the fair value of stock options, the Company segregates its options into two homogeneous groups, based on exercise and post-vesting employment termination behaviors, resulting in different assumptions used for expected option lives. Historical data is used to estimate the expected option life for each group. Expected volatility is based on the historical volatility in the Company’s stock price. The following weighted-average assumptions were used for options granted in the years ended December 31, 2019, 2018 and 2017, respectively: Expected Volatility Risk-free Interest Rate Expected Term Dividend December 31, 2019: Employees 88% 2.2% 4 0 % Officers and non-employee directors 77% 2.6% 8 0 % December 31, 2018: Employees 58% 2.6% 4 0 % Officers and non-employee directors 63% 2.8% 8 0 % December 31, 2017: Employees 61% 1.7% 4 0 % Officers and non-employee directors 70% 2.2% 8 0 % Income Taxes: The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized differently in the financial statements and tax returns. The Company uses the liability method in accounting for income taxes. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of liabilities and assets using enacted tax rates and laws in effect in the years in which the differences are expected to reverse. Deferred tax assets are evaluated for realization based on a more-likely-than-not criteria in determining if a valuation allowance should be provided. The Company maintains a valuation allowance on net operating losses and other deferred tax assets. Accordingly, the Company has not reported any tax benefit relating to the remaining net operating loss carryforwards and income tax credit carryforwards that are available for utilization in future periods. On a periodic basis, the valuation allowance is reassessed on deferred income tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets. In 2019, the Company reassessed the valuation allowance and considered negative evidence, including the cumulative losses over the three years ended December 31, 2019, and positive evidence, including the income during the year ended December 31, 2019 and projections of future income. After assessing both the negative evidence and the positive evidence, the Company concluded that it should continue to maintain the valuation allowance on net operating losses and other deferred tax assets as of December 31, 2019 given the significance of the weight of the negative evidence. Based on recent financial performance and future projections, the Company could record a reversal of all, or a portion of the valuation allowance associated with U.S. deferred tax assets in future periods. However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time of the assessment. The total deferred tax asset balance subject to the valuation allowance was approximately $333.6 million at December 31, 2019. Significant judgment is required in making these assessments to maintain or reverse valuation allowances and, to the extent future expectations change the Company would have to assess the recoverability of these deferred tax assets at that time. The Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted on December 22, 2017. The 2017 Tax Act significantly changes U.S. corporate income tax laws, including a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent, reduction of certain tax credits, limitations on, or deductibility of interest expense and executive compensation, and limitations on the use of net operating loss carryforwards. Net Income (Loss) per Common Share: Net income (loss) per common share is computed using the weighted average number of shares of common stock outstanding. Shares associated with convertible debt, stock options and restricted stock units that could potentially dilute earnings per share in the future are not included in the computation of diluted earnings per share because they are antidilutive. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
Recent Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, “Leases.” ASU 2016-02 requires companies that lease assets to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The pronouncement also requires additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. This pronouncement was effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. This ASU was required to be adopted using a modified retrospective approach. Management adopted ASU 2016-02 on the effective date of January 1, 2019 and elected the practical expedient that allows entities to not apply the new guidance in the comparative periods they present in their financial statements in the year of adoption. Consequently, prior year financial information has not been updated and the disclosures required under the new standard have not been provided for periods prior to January 1, 2019. Upon adoption, the Company recognized $2.1 million for right-of-use assets and corresponding liabilities on the consolidated balance sheet, primarily related to leases of office space. The adoption of this ASU on January 1, 2019 did not have a material impact on Lexicon’s consolidated financial statements. Pronouncements Not Yet Adopted. In November 2018, the FASB issued ASU No. 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606". This targeted amendment to Topic 808 clarifies that certain transactions resulting from a collaborative agreement should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer for a good or service that is a distinct unit-of-account. This amendment is effective for fiscal years, and interim periods within years presented, beginning after December 15, 2019, and should be applied retrospectively to the date of initial application of Topic 606. The Company has applied the provisions of Topic 606 to account for its transactions for collaboration arrangements, including recognition, measurement, presentation and disclosure requirements, and does not expect adoption of this ASU to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other,” which is intended to simplify the subsequent measurement of goodwill. The pronouncement allows an entity, during its annual or interim goodwill impairment evaluation, to compare the fair value of a reporting unit with its carrying amount. An impairment charge is immediately recognized by which the carrying amount exceeds the fair value. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company does not expect adoption of this ASU to have a material impact on its consolidated financial statements. |
Cash and Cash Equivalents and I
Cash and Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents and Investments [Abstract] | |
Cash and Cash Equivalents and Investments | Cash and Cash Equivalents and Investments The fair value of cash and cash equivalents and investments held at December 31, 2019 and 2018 are as follows: As of December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 36,112 $ — $ — $ 36,112 Securities maturing within one year: U.S. treasury securities 235,463 94 (10) 235,547 Total short-term investments $ 235,463 $ 94 $ (10) $ 235,547 Total cash and cash equivalents and investments $ 271,575 $ 94 $ (10) $ 271,659 As of December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 80,386 $ — $ — $ 80,386 Securities maturing within one year: U.S. treasury securities 73,983 — (9) 73,974 Corporate debt securities 5,695 — (3) 5,692 Total short-term investments $ 79,678 $ — $ (12) $ 79,666 Total cash and cash equivalents and investments $ 160,064 $ — $ (12) $ 160,052 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. The following levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities: • Level 1 – quoted prices in active markets for identical assets, which include U.S. treasury securities • Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.), which include corporate debt securities • Level 3 – significant unobservable inputs The inputs or methodology used for valuing securities are not necessarily an indication of the credit risk associated with investing in those securities. The following tables provide the fair value measurements of applicable Company assets and liabilities that are measured at fair value on a recurring basis according to the fair value levels defined above as of December 31, 2019 and 2018. Assets and Liabilities at Fair Value As of December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 36,112 $ — $ — $ 36,112 Short-term investments 235,547 — — 235,547 Total cash and cash equivalents and investments $ 271,659 $ — $ — $ 271,659 Assets and Liabilities at Fair Value As of December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 80,386 $ — $ — $ 80,386 Short-term investments 73,974 5,692 — 79,666 Total cash and cash equivalents and investments $ 154,360 $ 5,692 $ — $ 160,052 The Company did not have any Level 3 assets or liabilities at December 31, 2019 or 2018. Transfers between levels are recognized at the actual date of circumstance that caused the transfer. There were no transfers between Level 1 and Level 2 during the periods presented. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment at December 31, 2019 and 2018 are as follows: Estimated Useful Lives As of December 31, In Years 2019 2018 (in thousands) Computers and software 3-5 $ 4,587 $ 4,557 Furniture and fixtures 5-7 5,629 5,644 Laboratory equipment 3-7 3,279 3,378 Leasehold improvements 3-7 417 416 Buildings 15-40 59,212 59,212 Land — 2,664 2,664 Total property and equipment 75,788 75,871 Less: Accumulated depreciation and amortization (61,741) (60,006) Net property and equipment $ 14,047 $ 15,865 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Lexicon recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized differently in the financial statements and tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of liabilities and assets using enacted tax rates and laws in effect in the years in which the differences are expected to reverse. Deferred tax assets are evaluated for realization based on a more-likely-than-not criteria in determining if a valuation allowance should be provided. The components of Lexicon’s deferred tax assets (liabilities) at December 31, 2019 and 2018 are as follows: As of December 31, 2019 2018 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 193,270 $ 206,789 Research and development tax credits 46,306 47,087 Orphan drug credits 24,524 24,524 Capitalized research and development 58,596 71,047 Stock-based compensation 5,340 4,641 Deferred revenue — 5,458 Interest — 3,625 Other 5,533 6,044 Total deferred tax assets 333,569 369,215 Deferred tax liabilities: Deferred tax liability related to acquisition of Symphony Icon (4,140) (10,525) Other (3) (2) Total deferred tax liabilities (4,143) (10,527) Less: valuation allowance (329,426) (364,702) Net deferred tax liabilities $ — $ (6,014) Deferred tax assets associated with net operating losses (NOLs), deferred revenue and interest decreased in 2019 due to the Termination Agreement (as defined in Note 13) with Sanofi. Refer to Note 13, Collaboration and License Agreements, for additional information. The $4.1 million deferred tax liability relates to the tax impact of future amortization or possible impairments associated with intangible assets acquired with Symphony Icon, which are not deductible for tax purposes. A reconciliation of the statutory tax rate to the effective tax rate for the years ended December 31, 2019, 2018 and 2017 consists of the following: Year Ended December 31, 2019 2018 2017 (in thousands) Expected income tax expense (benefit) at 21%, 21% and 35%, respectively $ 26,065 $ (25,315) $ (47,479) State income taxes, net of federal benefit 445 (809) (2,324) Equity compensation 1,688 1,059 1,447 Research and development credit — (978) (1,993) Orphan drug credit — — (189) Deferred true-up — — (5,316) Tax rate change — — 169,464 Symphony Icon fair value adjustment — — 735 Change in valuation allowance (35,276) 25,928 (126,634) Other (1) 1,064 115 (372) Income tax benefit $ (6,014) $ — $ (12,661) (1) Other is primarily comprised of expiring Research and Development credits for the year ended December 31, 2019. At December 31, 2019, Lexicon had both federal and state NOL carryforwards of approximately $879.7 million and $83.0 million, respectively. In 2019, federal NOLs decreased by $62.2 million primarily due to utilization against taxable income. The state NOL carryforwards decreased due to a legislative change from pre-apportionment to post-apportionment reporting in New Jersey. The federal and state NOL carryforwards will begin to expire in 2022. The Company’s R&D tax credit carryforwards of approximately $46.3 million begin to expire in 2020. The orphan drug credit relates to a credit that is calculated as a percentage of expenditures for development of XERMELO, which has received Orphan Drug designation from the FDA. Utilization of the NOL, R&D credit and orphan drug credit carryforwards may be subject to a significant annual limitation due to ownership changes that have occurred previously or could occur in the future provided by Section 382 of the Internal Revenue Code. Although NOLs were utilized in 2019, based on the federal tax law limits and the Company's cumulative loss position, Lexicon concluded it was appropriate to establish a full valuation allowance for its net deferred tax assets until an appropriate level of profitability is sustained. During the year ended December 31, 2019, the valuation allowance decreased $35.3 million, primarily due to the Company’s utilization of NOLs and decreases to deferred revenue and interest deferred tax assets. Lexicon recorded an income tax benefit of $6.0 million in the year ended December 31, 2019 despite reporting pretax income for the year. The result reflects the impact of the impairment of intangible assets associated with Symphony Icon and the benefit from the utilization of federal NOLs for which a tax benefit had not previously been recognized, partially offset by nondeductible expenses. There were no income tax benefits in the year ended December 31, 2018. Income tax benefits of $12.7 million were recorded for the year ended December 31, 2017. Of the $12.7 million tax benefits, $8.7 million is the release of a valuation allowance as a result of the ability to estimate the reversal of the deferred tax liability related to the intangible associated with XERMELO and $4.0 million was recorded to remeasure the deferred tax liability associated with the remaining indefinite-lived intangible asset associated with Symphony Icon at the newly enacted U.S. corporate income tax rate. As of December 31, 2019 and 2018, the Company did not have any unrecognized tax benefits. The Company is primarily subject to U.S. federal and New Jersey and Texas state income taxes. The tax years 1995 to current remain open to examination by U.S. federal authorities and 2004 to current remain open to examination by state authorities. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill [Abstract] | |
Goodwill | Goodwill On July 12, 2001, Lexicon completed the acquisition of Coelacanth Corporation in a merger. Coelacanth, now Lexicon Pharmaceuticals (New Jersey), Inc., formed the core of the Company’s division responsible for small molecule compound discovery. The results of Lexicon Pharmaceuticals (New Jersey), Inc. are included in the Company’s results of operations for the period subsequent to the acquisition. Goodwill associated with the acquisition of $25.8 million, which represents the excess of the $36.0 million purchase price over the fair value of the underlying net identifiable assets, was assigned to the consolidated entity, Lexicon. On July 30, 2010, Lexicon exercised its Purchase Option and completed the acquisition of Symphony Icon, Inc. Goodwill associated with the acquisition of $18.7 million, which represents the assets recognized in connection with the deferred tax liability acquired and did not result from excess purchase price, was assigned to the consolidated entity, Lexicon. Goodwill is not subject to amortization, but is tested at least annually for impairment at the reporting unit level, which is the Company’s single operating segment. The Company performed an impairment test of goodwill on its annual impairment assessment date. This test did not result in an impairment of goodwill. |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2019 | |
Debt Obligations [Abstract] | |
Debt Obligations | Debt Obligations Convertible Notes. In November 2014, Lexicon completed an offering of $87.5 million in aggregate principal amount of its 5.25% Convertible Senior Notes due 2021 (the “Convertible Notes”). The conversion feature did not meet the criteria for bifurcation as required by generally accepted accounting principles and the entire principal amount was recorded as long-term debt on the Company’s consolidated balance sheets. The Convertible Notes are governed by an indenture (the “Indenture”), dated as of November 26, 2014, between the Company and Wells Fargo Bank, N.A., as trustee. The Convertible Notes bear interest at a rate of 5.25% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2015. The Convertible Notes mature on December 1, 2021. The Company may not redeem the Convertible Notes prior to the maturity date, and no sinking fund is provided for the Convertible Notes. Holders of the Convertible Notes may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding the maturity date. Upon conversion, the Company will deliver for each $1,000 principal amount of converted Convertible Notes a number of shares of its common stock equal to the conversion rate, as described in the Indenture. The conversion rate is initially 118.4553 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of $8.442 per share of common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. If the Company undergoes a fundamental change, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In connection with the issuance of the Convertible Notes, the Company incurred $3.4 million of debt issuance costs. The debt issuance costs are amortized as interest expense over the expected life of the Convertible Notes using the effective interest method. The Company determined the expected life of the debt was equal to the seven The fair value of the Convertible Notes was $64.8 million as of December 31, 2019 and was determined using Level 2 inputs based on the indicative pricing published by certain investment banks or trading levels of the Convertible Notes, which are not listed on any securities exchange or quoted on an inter-dealer automated quotation system. Mortgage Loan. In August 2018, a wholly owned subsidiary of Lexicon entered into a term loan and security agreement, refinancing the previously existing mortgage on its facilities in The Woodlands, Texas (the “Property”). The Company recorded the refinancing as a debt extinguishment, with no recognition of gain or loss on the transaction. The loan agreement provides for a $12.9 million mortgage on the Property and has a two two In January 2020, Lexicon’s wholly owned subsidiary entered into a real estate purchase and sale agreement under which Lexicon agreed to sell its facilities in The Woodlands, Texas. Such sale is subject to normal and customary closing conditions, including a study period, which extends until April 9, 2020, during which the purchaser may conduct inspections, analyses and other studies of the property and may terminate the agreement in its discretion. Such sale is also subject to the negotiation and execution by the parties of a leaseback agreement for a period of six months with respect to a portion of the property concurrently with closing. BioPharma Term Loan. In December 2017, Lexicon entered into a loan agreement with BioPharma Credit PLC and BioPharma Credit Investments IV Sub LP under which $150 million was funded in December 2017 (the “BioPharma Term Loan”). The BioPharma Term Loan matures in December 2022, bears interest at 9% per year, subject to additional interest if an event of default occurs and is continuing, and is payable quarterly. The BioPharma Term Loan is subject to mandatory prepayment provisions that require prepayment upon a change of control or receipt of proceeds from certain non-ordinary course transfers of assets. The Company may prepay the BioPharma Term Loan in whole at its option at any time. Any prepayment of the BioPharma Term Loan is subject to customary make-whole premiums and prepayment premiums. The Company’s obligations under the BioPharma Term Loan are secured by a first lien security interest in substantially all of the assets of the Company and certain of its subsidiaries, other than its facilities in The Woodlands, Texas. The loan agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default applicable to the Company and certain of its subsidiaries, including among other things, covenants restricting dispositions, fundamental changes in our business, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and subordinated debt. If an event of default occurs and is continuing, all amounts outstanding under the BioPharma Term Loan may be declared immediately due and payable. In connection with the BioPharma Term Loan, the Company incurred $4.1 million of debt issuance costs. The debt issuance costs are amortized as interest expense over the expected life of the BioPharma Term Loan using the effective interest method. The Company determined the expected life of the debt was equal to the five The fair value of the BioPharma Term Loan approximates its carrying value. The fair value of the BioPharma Term Loan was determined using Level 2 inputs using discounted cash flow analysis, based on the Company’s estimated current incremental borrowing rate. The following table includes the aggregate scheduled future principal payments of the Company’s long-term debt as of December 31, 2019: For the Year Ending (in thousands) 2020 $ 11,130 2021 87,500 2022 150,000 2023 — 2024 — Thereafter — Total debt 248,630 Less deferred financing costs (3,447) Less current portion (11,012) Total long-term debt $ 234,171 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease Obligations : A Lexicon subsidiary leases office space in Basking Ridge, New Jersey under a lease agreement, the term of which began in June 2015 and terminates in December 2022. As disclosed in Note 3, Lexicon adopted ASU 2016-02, "Leases", on January 1, 2019. As of December 31, 2019, the office space lease right-of-use (ROU) asset had a balance of $1.7 million, which is included in other assets in the consolidated balance sheet, and current and non-current liabilities relating to the ROU asset were $0.6 million and $1.1 million, respectively, which are included in accrued liabilities and other long-term liabilities in the consolidated balance sheet, respectively. The discount rate used to record the office space lease was Lexicon's estimated borrowing rate of 9%. Lexicon elected to apply the short-term lease exception to all leases one year or less. The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at December 31, 2019: (in thousands) 2020 $ 620 2021 632 2022 645 2023 — 2024 — Thereafter — Total undiscounted operating lease liability 1,897 Less: amount of lease payments representing interest (242) Present value of future lease payments 1,655 Less: short-term operating lease liability (553) Long-term operating lease liability $ 1,102 Employment Arrangements: Lexicon has entered into employment arrangements with certain of its corporate officers. Under the arrangements, each officer receives a base salary, subject to adjustment, with an annual discretionary bonus based upon specific objectives to be determined by the compensation committee. The employment arrangements are at-will and some contain non-competition agreements. Some of the arrangements also provide for certain severance payments for either six Legal Proceedings: On January 28, 2019, a purported securities class action complaint captioned Daniel Manopla v. Lexicon Pharmaceuticals, Inc., Lonnel Coats, Jeffrey L. Wade and Pablo Lapuerta, M.D. was filed against the Company and certain of its officers in the U.S. District Court for the Southern District of Texas, Houston Division. A first amended complaint was filed on July 30, 2019 and Lexicon filed a motion to dismiss such first amended complaint on September 30, 2019. The plaintiff filed an opposition to Lexicon's motion to dismiss on November 14, 2019 and Lexicon filed a reply in support of its motion to dismiss on December 13, 2019. The lawsuit purports to be a class action brought on behalf of purchasers of the Company’s securities during the period from March 11, 2016 through July 29, 2019. The complaint alleges that the defendants violated federal securities laws by making materially false and misleading statements and/or omissions concerning data from its Phase 3 clinical trials of sotagliflozin in type 1 diabetes patients and the prospects of FDA approval of sotagliflozin for the treatment of type 1 diabetes. The complaint purports to assert claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint seeks, on behalf of the purported class, an unspecified amount of monetary damages, interest, fees and expenses of attorneys and experts, and other relief. In addition, Lexicon is from time to time party to claims and legal proceedings that arise in the normal course of its business and that it believes will not have, individually or in the aggregate, a material adverse effect on its results of operations, financial condition or liquidity. |
Equity Incentive Awards
Equity Incentive Awards | 12 Months Ended |
Dec. 31, 2019 | |
Equity Incentive Awards [Abstract] | |
Equity Incentive Awards | Equity Incentive Awards Equity Incentive Plans 2017 Equity Incentive Plan: In September 1995, Lexicon adopted the 1995 Stock Option Plan, which was subsequently amended and renamed the 2017 Equity Incentive Plan (the “Equity Incentive Plan”). The Equity Incentive Plan provides for the grant of incentive stock options to employees and nonstatutory stock options to employees, directors and consultants of the Company. The plan also permits the grant of stock bonus awards, restricted stock awards, restricted stock unit awards, stock appreciation rights and performance stock awards. Incentive and nonstatutory stock options have an exercise price of 100% or more of the fair market value of the Company’s common stock on the date of grant. Most stock options granted under the Equity Incentive Plan become vested and exercisable over a period of four years; however some have been granted with different vesting schedules. Stock options granted under the Equity Incentive Plan have a term of ten years from the date of grant. The total number of shares of common stock that may be issued pursuant to stock awards under the Equity Incentive Plan shall not exceed in the aggregate 20,000,000 shares at December 31, 2019. In the first quarter of 2020, the Company amended the 2017 Equity Incentive Plan, subject to stockholder approval, to increase the aggregate number of shares that may be issued under the plan to 30,000,000 shares. As of December 31, 2019, options to purchase 7,456,905 shares and 2,801,928 restricted stock units were outstanding, 1,909,515 shares had been issued upon the exercise of stock options, 1,968,979 shares had been issued pursuant to restricted stock units and 113,940 shares had been issued pursuant to stock bonus awards or restricted stock awards granted under the Equity Incentive Plan. 2017 Non-Employee Directors’ Equity Incentive Plan: In February 2000, Lexicon adopted the 2000 Non-Employee Directors’ Stock Option Plan, which was subsequently amended and renamed the 2017 Non-Employee Directors’ Equity Incentive Plan (the “Directors’ Plan”). Under the Directors’ Plan, non-employee directors may be granted awards under the plan with an aggregate grant date fair value of no more than $500,000 during any calendar year, taken together with any cash fees paid to such non-employee director in compensation for service on Lexicon’s board of directors during such calendar year. Stock options granted under the Directors’ Plan have an exercise price equal to the fair market value of the Company’s common stock on the date of grant and a term of ten years from the date of grant. The total number of shares of common stock that may be issued pursuant to stock awards under the Directors’ Plan shall not exceed in the aggregate 600,000 shares. As of December 31, 2019, stock options to purchase 237,850 shares were outstanding, none had been issued upon the exercise of stock options, 27,728 restricted stock units were outstanding and 103,208 shares had been issued pursuant to restricted stock awards granted under the Directors’ Plan. Stock Option Activity: The following is a summary of stock option activity under Lexicon’s equity incentive plans: 2019 2018 2017 (in thousands, except exercise price data) Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding at beginning of year 6,152 $ 10.68 4,961 $ 11.17 4,834 $ 11.24 Granted 2,435 5.06 1,916 10.00 892 14.31 Exercised — — (97) 7.55 (458) 11.97 Expired (212) 9.95 (239) 14.21 (157) 26.42 Forfeited (680) 10.42 (389) 12.04 (150) 13.84 Outstanding at end of year 7,695 8.95 6,152 10.68 4,961 11.17 Exercisable at end of year 4,275 $ 10.56 3,620 $ 10.72 3,077 $ 10.95 The weighted average estimated grant date fair value of stock options granted during the years ended December 31, 2019, 2018 and 2017 were $3.18, $5.63 and $8.59, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2018 and 2017 were $0.2 million and $2.0 million, respectively. The weighted average remaining contractual term of stock options outstanding and exercisable was 6.8 and 5.3 years, respectively, as of December 31, 2019. At December 31, 2019, the aggregate intrinsic value of the outstanding stock options was $0.2 million. At December 31, 2019, there was no intrinsic value of exercisable stock options. Stock Bonus and Restricted Stock Unit Activity: During the year ended December 31, 2019, Lexicon granted its non-employee directors 27,728 restricted stock units and during the year ended December 31, 2018 and 2017, granted its non-employee directors 20,512 and 10,248 shares, respectively, of restricted stock awards. The restricted stock in 2019, 2018 and 2017 had weighted average grant date fair values of $5.67, $7.80 and $15.61 per share, respectively. Vesting of restricted stock units occurs on the first anniversary of the grant date and vesting of restricted stock awards is immediate. During the years ended December 31, 2019, 2018 and 2017, Lexicon granted its employees restricted stock units in lieu of or in addition to annual stock option awards. These restricted stock units vest in three four The following is a summary of restricted stock units activity under Lexicon’s stock-based compensation plans for the year ended December 31, 2019: Shares Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2018 1,286 $ 10.17 Granted 2,446 5.05 Vested (517) 9.60 Forfeited (385) 6.50 Outstanding at December 31, 2019 2,830 $ 6.35 Aggregate Shares Reserved for Issuance As of December 31, 2019, an aggregate of 10,524,411 shares of common stock were reserved for issuance upon exercise of outstanding stock options and vesting of outstanding restricted stock units and 5,979,947 additional shares were available for future grants under Lexicon’s equity incentive plans. The Company has a policy of using either authorized and unissued shares or treasury shares, including shares acquired by purchase in the open market or in private transactions, to satisfy equity award exercises. |
Benefit Plan
Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Benefit Plan [Abstract] | |
Benefit Plan | Benefit Plan Lexicon maintains a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. The plan covers substantially all full-time employees. Participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. Beginning in 2000, the Company was required to match employee contributions according to a specified formula. The matching contributions totaled $1.2 million, $1.0 million and $1.0 million in the years ended December 31, 2019, 2018 and 2017, respectively. Company contributions are vested based on the employee’s years of service, with full vesting after four |
Collaboration and License Agree
Collaboration and License Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Collaboration and License Agreements [Abstract] | |
Collaboration and License Agreements | Collaboration and License Agreements Lexicon has derived substantially all of its revenues from drug discovery and development alliances, target validation collaborations for the development and, in some cases, analysis of the physiological effects of genes altered in knockout mice, product sales, government grants and contracts, technology licenses, subscriptions to its databases and compound library sales. Sanofi. In November 2015, Lexicon entered into a Collaboration and License Agreement, which was subsequently amended in July 2017 (collectively, the “Sanofi Agreement”), with Sanofi for the worldwide development and commercialization of Lexicon’s diabetes drug candidate sotagliflozin. In December 2016, Sanofi terminated its rights under the Sanofi Agreement with respect to Japan. Effective as of September 9, 2019 (the “Settlement Date”), Lexicon entered into a Termination and Settlement Agreement and Mutual Releases (the “Termination Agreement”) with Sanofi, pursuant to which the Sanofi Agreement was terminated and associated disputes between Lexicon and Sanofi were settled. Under the terms of the Termination Agreement, Lexicon regained all rights to sotagliflozin and assumed full responsibility for the worldwide development and commercialization of sotagliflozin in all indications. Sanofi paid Lexicon $208 million in September 2019, $26 million in March 2020 (less amounts withheld by Sanofi offsetting certain third party costs and internal costs incurred by Sanofi and asserted by Sanofi to be payable by Lexicon under the terms of the Termination Agreement) and is obligated to pay an additional $26 million within twelve months of the Settlement Date, and neither party will owe additional payments pursuant to the Sanofi Agreement. The parties have cooperated in the transition of responsibility for ongoing clinical studies and other activities, and each party is responsible for its own expenses associated with such transition, subject to certain exceptions. The following is a summary description of the Sanofi Agreement without giving effect to the Termination Agreement. Under the Sanofi Agreement, Lexicon had granted Sanofi an exclusive, worldwide (excluding Japan), royalty-bearing right and license under its patent rights and know-how to develop, manufacture and commercialize sotagliflozin. Subject to specified exceptions, neither party could (a) perform clinical development activities relating to any other compound which inhibits sodium-glucose cotransporters type 1 or type 2 or (b) commercialize any such compounds in the United States, countries of the European Union and certain other specified countries, in each case during the royalty terms applicable in such countries. Among the specified exceptions was a right Lexicon retained to pursue the development of its development candidate LX2761, with respect to which Lexicon granted Sanofi certain rights of first negotiation specified in the Sanofi Agreement. Under the Sanofi Agreement, Sanofi paid Lexicon an upfront payment of $300 million. In addition, Lexicon was eligible to receive from Sanofi (a) up to an aggregate of $110 million upon the achievement of four development milestones relating to the results of certain Phase 3 clinical trials of sotagliflozin in type 2 diabetes patients, (b) up to an aggregate of $220 million upon the achievement of four regulatory milestones relating to the first commercial sale following regulatory approval of sotagliflozin for type 1 and type 2 diabetes, respectively, in each of the United States and Europe, of which two milestones representing the substantial majority of such aggregate amount relate to type 2 diabetes and the remaining two milestones relate to type 1 diabetes, (c) $100 million upon the achievement of a milestone based on the results of either of two outcomes studies in type 2 diabetes patients, the completion of which would likely occur after initial regulatory approval of sotagliflozin in type 2 diabetes, and (d) up to an aggregate of $990 million upon the achievement of six commercial milestones that will be achieved upon reaching specified levels of sales. The Company believed that each of the development and regulatory milestones under the Sanofi Agreement was substantive. Due to the uncertainty surrounding the achievement of the future development and regulatory milestones, these payments were deemed constrained and were not recognized as revenue. Commercial milestones would have been accounted for as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria were met. Lexicon was also entitled to tiered, escalating royalties ranging from low double digit percentages to forty percent of net sales of sotagliflozin, based on indication and territory, with royalties for the higher band of such range attributable to net sales for type 1 diabetes in the United States, and subject in each case to customary royalty reduction provisions. Lexicon continued to be responsible for all clinical development activities relating to type 1 diabetes and exercised an exclusive option to co-promote and have a significant role, in collaboration with Sanofi, in the commercialization of sotagliflozin for the treatment of type 1 diabetes in the United States. Under the terms of its co-promotion option, Lexicon would have funded forty percent of the commercialization costs relating to such co-promotion activities. Sanofi was responsible for all clinical development and commercialization of sotagliflozin for the treatment of type 2 diabetes worldwide and would have been solely responsible for the commercialization of sotagliflozin for the treatment of type 1 diabetes outside the United States. Lexicon shared in the funding of a portion of the planned type 2 diabetes development costs over the first three The parties were responsible for using commercially reasonable efforts to perform their development and commercialization obligations pursuant to mutually approved development and commercialization plans. The parties’ activities under the Sanofi Agreement were governed by a joint steering committee and certain other governance committees which reflected equal or other appropriate representation from both parties. If the applicable governance committee was not able to make a decision by consensus and the parties were not able to resolve the issue through escalation to specified senior executive officers of the parties, then Sanofi would have final decision-making authority, subject to limitations specified in the Sanofi Agreement. The Sanofi Agreement would have expired upon the expiration of all applicable royalty terms for all licensed products in all countries. The royalty term for each licensed product in each country was the period commencing on the effective date of the Sanofi Agreement and ending on the latest of expiration of specified patent coverage, expiration of specified regulatory exclusivity and 10 years following the first commercial sale in the applicable country. Either party could terminate the Sanofi Agreement in the event of an uncured material breach by the other party. Prior to completion of the core development activities for type 2 diabetes specified in the development plan, Sanofi could terminate the Sanofi Agreement on a country-by-country and licensed product-by-licensed product basis, in the event of (a) notification of a material safety issue relating to the licensed product or the class of sodium-glucose cotransporters type 1 or type 2 inhibitors resulting in a recommendation or requirement that Lexicon or Sanofi cease development, (b) failure to achieve positive results with respect to certain clinical trial results, (c) the occurrence of specified fundamental adverse events or (d) the exploitation of the licensed product infringing third party intellectual property rights in specified major markets and Sanofi is unable to obtain a license to such third party intellectual property rights. The Company considered the following as its performance obligations with respect to the revenue recognition of the $300 million upfront payment: • The exclusive worldwide license granted to Sanofi to develop and commercialize sotagliflozin; • The development services Lexicon is performing for sotagliflozin relating to type 1 diabetes; and • The funding Lexicon will provide for development relating to type 2 diabetes. The Company determined that the license had stand-alone value because it was an exclusive license that gave Sanofi the right to develop and commercialize sotagliflozin or to sublicense its rights. In addition, sotagliflozin is currently in development and it was possible that Sanofi or another third party could conduct clinical trials without assistance from Lexicon. As a result, the Company considered the license and the development services under the Sanofi Agreement to be separate performance obligations. The Company recognized the portion of the transaction price allocated to the license immediately because Lexicon delivered the license and earned the revenue at the inception of the arrangement. The Company was recognizing as revenue the amount allocated to the development services for type 1 diabetes over the period of time Lexicon performed services, which was expected to be through 2027, and recognized as revenue the obligation to provide funding for development services for type 2 diabetes over the period of time Lexicon provided the funding, which was completed in 2018. The Company determined that the initial transaction price was the $300 million upfront payment because it was the only payment that was fixed and determinable at the inception of the arrangement. There was considerable uncertainty at the date of the agreement as to whether Lexicon would earn milestone payments or royalty payments. As such, the Company did not include those payments in the allocable consideration. The Company allocated the transaction price based on the relative best estimate of selling price of each performance obligation. The Company estimated the selling price of the license deliverable by applying a probability-based income approach utilizing an appropriate discount rate. The significant inputs the Company used to determine the projected income of the license included: exercising the option to co-promote, estimated future product sales, estimated cost of goods sold, estimated operating expenses, income taxes, and an appropriate discount rate. The Company estimated the selling price of the development services for type 1 diabetes by using internal estimates of the cost to hire third parties to perform the services over the expected period to perform the development. The Company estimated the obligation to provide funding for type 2 diabetes by using internal estimates of the expected cash flows and timing for $100 million in funding. As a result of the allocation of the Sanofi Agreement, the Company recognized $126.8 million of the $300 million upfront payment for the license in 2015. The Company was recognizing the $113.8 million allocated to the development services performance obligation and the $59.4 million allocated to the funding performance obligation over the estimated period of performance as the development and funding occurred. The Termination Agreement was accounted for as a modification under ASC 606. Upon execution of the Termination Agreement in September 2019, the Company recognized the remaining $23.5 million allocated to Lexicon's performance obligations as revenue and reduced its remaining deferred revenue balance accordingly. In addition, the Company recognized revenue of $260 million, representing the full cash consideration from the Termination Agreement. The Company has no remaining performance obligations to Sanofi. Revenue recognized under the collaboration agreements with Sanofi was $286 million, $33.2 million and $60.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. Ipsen. In October 2014, Lexicon entered into a License and Collaboration Agreement, which was subsequently amended in March 2015 (collectively, the “Ipsen Agreement”), with Ipsen for the development and commercialization of XERMELO outside of the United States and Japan (the “Licensed Territory”). Under the Ipsen Agreement, Lexicon granted Ipsen an exclusive, royalty-bearing right and license under its patent rights and know-how to commercialize XERMELO in the Licensed Territory. Ipsen is responsible for using diligent efforts to commercialize XERMELO in the Licensed Territory pursuant to a mutually approved commercialization plan. Subject to certain exceptions, Lexicon was responsible for conducting clinical trials required to obtain regulatory approval for XERMELO for carcinoid syndrome in the European Union, including those contemplated by a mutually approved initial development plan, and has the first right to conduct most other clinical trials of XERMELO. Lexicon was responsible for the costs of all clinical trials contemplated by the initial development plan. The costs of additional clinical trials will be allocated between the parties based on the nature of such clinical trials. Under the Ipsen Agreement, Ipsen has paid Lexicon an aggregate of $47.2 million through December 31, 2019, consisting of $24.5 million in upfront payments, a $6.4 million milestone upon the acceptance of the filing submitted by Ipsen to the European Medicines Agency for XERMELO as an adjunct to somatostatin analog therapy for the long-term treatment of carcinoid syndrome, a $5.1 million milestone upon Ipsen’s receipt of approval from the European Commission for the marketing of XERMELO in all member states of the European Union, Norway and Iceland, a $3.8 million milestone upon Ipsen’s first commercial sale in Germany, a $3.8 million milestone upon Ipsen’s first commercial sale in the United Kingdom, a $1.3 million milestone upon Ipsen’s receipt of approval from Health Canada and a $2.3 million milestone upon Ipsen's first commercial sale in Canada. In addition, Lexicon is eligible to receive from Ipsen (a) up to an aggregate of approximately $9.6 million upon the achievement of specified regulatory and commercial launch milestones and (b) up to an aggregate of €72 million upon the achievement of specified sales milestones. Milestone payments are deemed constrained. Lexicon is also entitled to tiered, escalating royalties ranging from low twenties to mid-thirties percentages of net sales of XERMELO in the Licensed Territory, subject to a credit for amounts previously paid to Lexicon by Ipsen for the manufacture and supply of such units of XERMELO. Lexicon and Ipsen have entered into a commercial supply agreement pursuant to which Lexicon supplies Ipsen’s commercial requirements of XERMELO, and Ipsen pays an agreed upon transfer price for such commercial supply. The Company considered the following as its performance obligations with respect to the revenue recognition of the $24.5 million upfront payment: • The exclusive license granted to Ipsen to develop and commercialize XERMELO in the Licensed Territory; • The development services Lexicon is performing for XERMELO; • The obligation to participate in committees which govern the development of XERMELO until commercialization; and • The obligation to supply commercial supply of XERMELO, under a commercial supply agreement. The Company determined that the license had stand-alone value because it is an exclusive license that grants Ipsen the right to develop and commercialize XERMELO or to sublicense its rights. In addition, at the time of the agreement, it would have been possible for Ipsen or another third party to conduct clinical trials without assistance from Lexicon. As a result, the Company considers the license and the development services under the Agreement to be separate performance obligations. The Company recognized the portion of the transaction price allocated to the license immediately because Lexicon delivered the license and earned the revenue at the inception of the arrangement. The Company is recognizing as revenue the amount allocated to the development services and the obligation to participate in committees over the period of time Lexicon performs services, which was completed in 2018. The Company determined that the commercial supply agreement is a contingent deliverable at the onset of the Agreement. There was inherent uncertainty in obtaining regulatory approval at the time of the agreement, thus, making the applicability of the commercial supply agreement outside the control of Lexicon and Ipsen. As a result, the Company has determined the commercial supply agreement does not meet the definition of a performance obligation that needs to be accounted for at the inception of the arrangement. The Company has also determined that there is no significant and incremental discount related to the commercial supply agreement that should be accounted for at the inception of the arrangement. The Company determined that the initial transaction price was the $24.5 million upfront payments because they were the only payments that were fixed and determinable at the inception of the arrangement. There was considerable uncertainty at the date of the agreement as to whether Lexicon would earn milestone payments, royalty payments or payments for finished drug product. As such, the Company did not include those payments in the transaction price. The Company allocated the transaction price based on the relative best estimate of selling price of each performance obligation. The Company estimated the selling price of the license deliverable by applying a probability-based income approach utilizing an appropriate discount rate. The significant inputs the Company used to determine the projected income of the license included: estimated future product sales, estimated cost of goods sold, estimated operating expenses, income taxes, and an appropriate discount rate. The Company estimated the selling price of the development services by using internal estimates of the cost to hire third parties to perform the services over the expected period to perform the development. The Company estimated the selling price of the obligation to participate in committees by using internal estimates of the number of internal hours and salary and benefits costs to perform these services. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings (Loss) Per Share The following is a summary of Lexicon's earnings (loss) per share calculations and reconciliations of basic to diluted earnings (loss) per share: Year Ended December 31, (In thousands, except per share amounts) 2019 2018 2017 Numerator: Net income (loss) $ 130,133 $ (120,548) $ (122,993) Add interest expense on Convertible Notes 5,067 — — Adjusted net income (loss) $ 135,200 $ (120,548) $ (122,993) Denominator: Shares used in computing net income (loss) per common share, basic 106,218 105,830 105,237 Add effect of potential dilutive securities Share based awards 164 — — Convertible Notes 10,365 — — Shares used in computing net income (loss) per common share, diluted 116,747 105,830 105,237 Net income (loss) per share - basic $ 1.23 $ (1.14) $ (1.17) Net income (loss) per share - diluted $ 1.16 $ (1.14) $ (1.17) For periods presented with a net loss, the weighted average number of shares outstanding are the same for both basic and diluted net loss per common share. The average number of shares associated with stock options and restricted stock units that were excluded from diluted earnings per share that would potentially dilute earnings per share in the future was 8,206,390, 7,438,134 and 5,907,643, respectively, for the years ended December 31, 2019, 2018 and 2017. For periods presented with a net loss, the shares associated with the Convertible Notes are not included in the computation of diluted earnings per share because they are antidilutive. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The table below sets forth certain unaudited statements of comprehensive income (loss) data, and net income (loss) per common share data, for each quarter of 2019 and 2018: (in thousands, except per share data) Quarter Ended March 31 June 30 September 30 December 31 (Unaudited) 2019 Revenues (1) $ 9,216 $ 9,682 $ 294,448 $ 8,727 Income (loss) from operations $ (17,469) $ (18,545) $ 224,676 $ (47,217) Net income (loss) $ (21,797) $ (23,018) $ 226,086 $ (51,138) Net income (loss) per common share, basic $ (0.21) $ (0.22) $ 2.13 $ (0.48) Net income (loss) per common share, diluted $ (0.21) $ (0.22) $ 1.95 (0.48) Shares used in computing net income (loss) per common share, basic 106,054 106,272 106,272 106,272 Shares used in computing net income (loss) per common share, diluted 106,054 106,272 116,640 106,272 2018 Revenues $ 25,374 $ 13,798 $ 6,966 $ 17,071 Loss from operations $ (37,713) $ (30,272) $ (22,927) $ (12,367) Net loss $ (41,821) $ (34,549) $ (27,396) $ (16,782) Net loss per common share, basic and diluted $ (0.40) $ (0.33) $ (0.26) $ (0.16) Shares used in computing net loss per common share, basic and diluted 105,668 105,848 105,881 105,920 (1) Revenues for the three months ended September 30, 2019 include $260 million from the Sanofi Termination Agreement, as defined in Note 13. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Consolidation, Policy | Basis of Presentation: The accompanying consolidated financial statements include the accounts of Lexicon and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation. In 2018, accounts payable included $5.7 million related to its accrual for clinical studies. The Company has reclassified this amount to accrued liabilities in the consolidated balance sheet for comparable presentation of accounts payable and accrued liabilities. |
Use of Estimates, Policy | Use of Estimates: The preparation of financial statements in conformity with U. S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
Cash and Cash Equivalents, Policy | Cash, Cash Equivalents and Short-Term Investments: Lexicon considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. As of December 31, 2019 and December 31, 2018, short-term investments consist of U.S. treasury bills and corporate debt securities. The Company’s short-term investments are classified as available-for-sale securities and are carried at fair value, based on quoted market prices of the securities. The Company views its available-for-sale securities as available for use in current operations regardless of the stated maturity date of the security. Unrealized gains and losses on such securities are reported as a separate component of stockholders’ equity. Net realized gains and losses, interest and dividends are included in interest income. The cost of securities sold is based on the specific identification method. |
Trade and Other Accounts Receivable, Policy | Accounts Receivable: Lexicon records trade accounts receivable in the normal course of business related to the sale of products or services. The allowance for doubtful accounts takes into consideration such factors as historical write-offs, the economic climate and other factors that could affect collectibility. Write-offs are evaluated on a case by case basis. |
Inventory, Policy [Policy Text Block] | Inventory: Inventories are determined at the lower of cost or market value with cost determined under the specific identification method and may consist of raw materials, work in process and finished goods. |
Concentration Risk Disclosure | Concentration of Credit Risk: Lexicon’s cash equivalents, investments and accounts receivable represent potential concentrations of credit risk. The Company attempts to minimize potential concentrations of risk in cash equivalents and investments by placing investments in high-quality financial instruments. The Company’s accounts receivable are unsecured and are concentrated in pharmaceutical and biotechnology companies located in Europe and the United States. The Company has not experienced any significant credit losses to date. |
Segment Reporting Disclosure | Segment Information and Significant Customers: Lexicon operates in one business segment, which primarily focuses on the discovery, development and commercialization of pharmaceutical products for the treatment of human disease. Substantially all of the Company’s revenues have been derived from drug discovery alliances, target validation collaborations for the development and, in some cases, analysis of the physiological effects of genes altered in knockout mice, technology licenses, subscriptions to its databases, product sales, government grants and contracts and compound library sales. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets: Intangible assets, net consist of in-process research and development acquired in business combinations, which are reported at fair value, less accumulated amortization. Intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives. |
Property and Equipment | Property and Equipment: Property and equipment that is held and used is carried at cost and depreciated using the straight-line method over the estimated useful life of the assets which ranges from three |
Impairment or Disposal of Long-Lived Assets, Policy | Impairment of Long-Lived Assets: Long-lived assets, right-of-use assets for leases and finite-lived intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount that the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Goodwill and Intangible Assets, Policy | Goodwill Impairment: Goodwill is not amortized, but is tested at least annually for impairment at the reporting unit level. The Company has determined that the reporting unit is the single operating segment disclosed in its current financial statements. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The first step in the impairment process is to determine the fair value of the reporting unit and then compare it to the carrying value, including goodwill. If the fair value exceeds the carrying value, no further action is required and no impairment loss is recognized. Additional impairment assessments may be performed on an interim basis if the Company encounters events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. |
Revenue Recognition, Policy | Revenue Recognition: Product Revenues Product revenues consist of commercial sales of XERMELO in the United States and sales of bulk tablets of XERMELO to Ipsen. Product revenues are recognized when the customer obtains control of the Company’s product, which occurs upon delivery to the customer. The Company recognizes product revenue net of applicable reserves for variable consideration, including allowances for customer credits, estimated rebates, chargebacks, discounts, returns, distribution service fees, and government rebates, such as Medicare Part D coverage gap reimbursements in the United States, as discussed below. These estimates are based on the most likely amount method for relevant factors such as current contractual and statutory requirements, industry data and forecasted customer buying and payment patterns. Product shipping and handling costs are considered a fulfillment activity when control transfers to the Company’s customers and such costs are included in cost of sales. Customer Credits: The Company’s customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts. The Company expects that its customers will earn prompt payment discounts. As a result, the Company deducts the full amount of those discounts from total product sales when revenues are recognized. Service fees are also deducted from product sales as they are earned. Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program. Rebate amounts are based upon contractual agreements or legal requirements with public sector (e.g., Medicaid) benefit providers. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements or legal requirements with public sector benefit providers. The allowance for rebates is based on statutory discount rates and expected utilization. The Company’s estimates for expected utilization of rebates are based on third party market research data and data received from the specialty pharmacies. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known unpaid rebates from the prior quarter. If actual future rebates vary from estimates, the Company may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Chargebacks: Chargebacks are discounts that occur when contracted customers purchase directly from a specialty pharmacy or distributor, who acts as a retailer. Contracted customers, which currently consist primarily of Public Health Service Institutions, non-profit clinics, and federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The specialty pharmacy or distributor, in turn, charges back to Lexicon the difference between the price paid by the specialty pharmacy or distributor and the discounted price paid to the specialty pharmacy or distributor by the customer. The allowance for chargeback is based on known sales to contracted customers. Medicare Part D Coverage Gap: The Medicare Part D prescription drug benefit mandates manufacturers to fund a portion of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. The Company’s estimates for the expected Medicare Part D coverage gap are based on data received from the specialty pharmacies and projections based on historical data. Funding of the coverage gap is generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters. If actual future funding varies from estimates, the Company may need to adjust prior period accruals, which would affect revenues in the period of adjustment. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. Collaborative Agreements |
Cost of Sales | Cost of Sales: Cost of sales consists of third-party manufacturing costs, freight and indirect overhead costs associated with sales of XERMELO. The Company began capitalizing inventory during 2017 once the FDA approved XERMELO as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to approval of XERMELO have been recorded as research and development expense in the consolidated statements of comprehensive income (loss). As a result, cost of sales for approximately the next twelve months will reflect a lower average per unit cost of materials. Product shipping and handling costs are included in cost of sales. Cost of sales also includes the amortization of the intangible asset for XERMELO using the straight-line method over the estimated useful life of 14 years. |
Research and Development Expense, Policy | Research and Development Expenses: Research and development expenses consist of costs incurred for company-sponsored as well as collaborative research and development activities. These costs include direct and research-related overhead expenses and are expensed as incurred. Technology license fees for technologies that are utilized in research and development and have no alternative future use are expensed when incurred. Substantial portions of the Company’s preclinical and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors. For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled and the duration of the study. The Company's estimates of the clinical study costs and costs to transition activities from Sanofi for development of sotagliflozin for type 2 diabetes, heart failure and chronic kidney disease was based on estimates of the services to be received and efforts to be expended pursuant to contracts with multiple vendors and the CRO that will conduct and manage the clinical studies on its behalf. The Company monitors patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to the Company by the vendors and clinical site visits. The Company’s estimates depend on the timeliness and accuracy of the data provided by the vendors regarding the status of each program and total program spending. The Company periodically evaluates the estimates to determine if adjustments are necessary or appropriate based on information it receives. |
Share-based Compensation, Option and Incentive Plans Policy | Stock-Based Compensation: The Company recognizes compensation expense in its statements of comprehensive income (loss) for share-based payments, including stock options and restricted stock units issued to employees, based on their fair values on the date of the grant, with the compensation expense recognized over the period in which an employee is required to provide service in exchange for the stock award. Stock-based compensation expense for awards without performance conditions is recognized on a straight-line basis. Stock-based compensation expense for awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the time the applicable condition is met. As of December 31, 2019, stock-based compensation cost for all outstanding unvested options and restricted stock units was $24.0 million, which is expected to be recognized over a weighted-average period of 1.1 years. |
Earnings Per Share, Policy | Net Income (Loss) per Common Share: Net income (loss) per common share is computed using the weighted average number of shares of common stock outstanding. Shares associated with convertible debt, stock options and restricted stock units that could potentially dilute earnings per share in the future are not included in the computation of diluted earnings per share because they are antidilutive. |
Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived, Policy | Indefinite-lived intangible assets are also tested annually for impairment and whenever indicators of impairment are present. When performing the impairment assessment, the Company first assesses qualitative factors to determine whether it is necessary to recalculate the fair value of its intangible assets. If management believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the intangible assets is less than its carrying amount, the Company calculates the asset’s fair value. If the carrying value of the asset exceeds its fair value, then the intangible asset is written down to its fair value. |
Income Tax, Policy | Income Taxes: The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized differently in the financial statements and tax returns. The Company uses the liability method in accounting for income taxes. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of liabilities and assets using enacted tax rates and laws in effect in the years in which the differences are expected to reverse. Deferred tax assets are evaluated for realization based on a more-likely-than-not criteria in determining if a valuation allowance should be provided. The Company maintains a valuation allowance on net operating losses and other deferred tax assets. Accordingly, the Company has not reported any tax benefit relating to the remaining net operating loss carryforwards and income tax credit carryforwards that are available for utilization in future periods. On a periodic basis, the valuation allowance is reassessed on deferred income tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets. In 2019, the Company reassessed the valuation allowance and considered negative evidence, including the cumulative losses over the three years ended December 31, 2019, and positive evidence, including the income during the year ended December 31, 2019 and projections of future income. After assessing both the negative evidence and the positive evidence, the Company concluded that it should continue to maintain the valuation allowance on net operating losses and other deferred tax assets as of December 31, 2019 given the significance of the weight of the negative evidence. Based on recent financial performance and future projections, the Company could record a reversal of all, or a portion of the valuation allowance associated with U.S. deferred tax assets in future periods. However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time of the assessment. The total deferred tax asset balance subject to the valuation allowance was approximately $333.6 million at December 31, 2019. Significant judgment is required in making these assessments to maintain or reverse valuation allowances and, to the extent future expectations change the Company would have to assess the recoverability of these deferred tax assets at that time. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Estimated future amortization expense for intangible assets as of December 31, 2019 is as follows: For the Year Ending (in thousands) 2020 $ 1,766 2021 1,766 2022 1,766 2023 1,766 2024 1,766 Thereafter 10,886 $ 19,716 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Expected Volatility Risk-free Interest Rate Expected Term Dividend December 31, 2019: Employees 88% 2.2% 4 0 % Officers and non-employee directors 77% 2.6% 8 0 % December 31, 2018: Employees 58% 2.6% 4 0 % Officers and non-employee directors 63% 2.8% 8 0 % December 31, 2017: Employees 61% 1.7% 4 0 % Officers and non-employee directors 70% 2.2% 8 0 % |
Cash and Cash Equivalents and_2
Cash and Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents and Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments | As of December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 36,112 $ — $ — $ 36,112 Securities maturing within one year: U.S. treasury securities 235,463 94 (10) 235,547 Total short-term investments $ 235,463 $ 94 $ (10) $ 235,547 Total cash and cash equivalents and investments $ 271,575 $ 94 $ (10) $ 271,659 As of December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 80,386 $ — $ — $ 80,386 Securities maturing within one year: U.S. treasury securities 73,983 — (9) 73,974 Corporate debt securities 5,695 — (3) 5,692 Total short-term investments $ 79,678 $ — $ (12) $ 79,666 Total cash and cash equivalents and investments $ 160,064 $ — $ (12) $ 160,052 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements [Abstract] | |
Fair Value, by Balance Sheet Grouping | Assets and Liabilities at Fair Value As of December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 36,112 $ — $ — $ 36,112 Short-term investments 235,547 — — 235,547 Total cash and cash equivalents and investments $ 271,659 $ — $ — $ 271,659 Assets and Liabilities at Fair Value As of December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 80,386 $ — $ — $ 80,386 Short-term investments 73,974 5,692 — 79,666 Total cash and cash equivalents and investments $ 154,360 $ 5,692 $ — $ 160,052 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment [Abstract] | |
Property, Plant and Equipment | Estimated Useful Lives As of December 31, In Years 2019 2018 (in thousands) Computers and software 3-5 $ 4,587 $ 4,557 Furniture and fixtures 5-7 5,629 5,644 Laboratory equipment 3-7 3,279 3,378 Leasehold improvements 3-7 417 416 Buildings 15-40 59,212 59,212 Land — 2,664 2,664 Total property and equipment 75,788 75,871 Less: Accumulated depreciation and amortization (61,741) (60,006) Net property and equipment $ 14,047 $ 15,865 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, 2019 2018 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 193,270 $ 206,789 Research and development tax credits 46,306 47,087 Orphan drug credits 24,524 24,524 Capitalized research and development 58,596 71,047 Stock-based compensation 5,340 4,641 Deferred revenue — 5,458 Interest — 3,625 Other 5,533 6,044 Total deferred tax assets 333,569 369,215 Deferred tax liabilities: Deferred tax liability related to acquisition of Symphony Icon (4,140) (10,525) Other (3) (2) Total deferred tax liabilities (4,143) (10,527) Less: valuation allowance (329,426) (364,702) Net deferred tax liabilities $ — $ (6,014) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory tax rate to the effective tax rate for the years ended December 31, 2019, 2018 and 2017 consists of the following: Year Ended December 31, 2019 2018 2017 (in thousands) Expected income tax expense (benefit) at 21%, 21% and 35%, respectively $ 26,065 $ (25,315) $ (47,479) State income taxes, net of federal benefit 445 (809) (2,324) Equity compensation 1,688 1,059 1,447 Research and development credit — (978) (1,993) Orphan drug credit — — (189) Deferred true-up — — (5,316) Tax rate change — — 169,464 Symphony Icon fair value adjustment — — 735 Change in valuation allowance (35,276) 25,928 (126,634) Other (1) 1,064 115 (372) Income tax benefit $ (6,014) $ — $ (12,661) |
Debt Obligations Debt Obligatio
Debt Obligations Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Obligations [Abstract] | |
Schedule of Maturities of Long-term Debt [Table Text Block] | The following table includes the aggregate scheduled future principal payments of the Company’s long-term debt as of December 31, 2019: For the Year Ending (in thousands) 2020 $ 11,130 2021 87,500 2022 150,000 2023 — 2024 — Thereafter — Total debt 248,630 Less deferred financing costs (3,447) Less current portion (11,012) Total long-term debt $ 234,171 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | (in thousands) 2020 $ 620 2021 632 2022 645 2023 — 2024 — Thereafter — Total undiscounted operating lease liability 1,897 Less: amount of lease payments representing interest (242) Present value of future lease payments 1,655 Less: short-term operating lease liability (553) Long-term operating lease liability $ 1,102 |
Equity Incentive Awards (Tables
Equity Incentive Awards (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Incentive Awards [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | 2019 2018 2017 (in thousands, except exercise price data) Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding at beginning of year 6,152 $ 10.68 4,961 $ 11.17 4,834 $ 11.24 Granted 2,435 5.06 1,916 10.00 892 14.31 Exercised — — (97) 7.55 (458) 11.97 Expired (212) 9.95 (239) 14.21 (157) 26.42 Forfeited (680) 10.42 (389) 12.04 (150) 13.84 Outstanding at end of year 7,695 8.95 6,152 10.68 4,961 11.17 Exercisable at end of year 4,275 $ 10.56 3,620 $ 10.72 3,077 $ 10.95 |
Schedule of Nonvested Restricted Stock Units Activity | Shares Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2018 1,286 $ 10.17 Granted 2,446 5.05 Vested (517) 9.60 Forfeited (385) 6.50 Outstanding at December 31, 2019 2,830 $ 6.35 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of Lexicon's earnings (loss) per share calculations and reconciliations of basic to diluted earnings (loss) per share: Year Ended December 31, (In thousands, except per share amounts) 2019 2018 2017 Numerator: Net income (loss) $ 130,133 $ (120,548) $ (122,993) Add interest expense on Convertible Notes 5,067 — — Adjusted net income (loss) $ 135,200 $ (120,548) $ (122,993) Denominator: Shares used in computing net income (loss) per common share, basic 106,218 105,830 105,237 Add effect of potential dilutive securities Share based awards 164 — — Convertible Notes 10,365 — — Shares used in computing net income (loss) per common share, diluted 116,747 105,830 105,237 Net income (loss) per share - basic $ 1.23 $ (1.14) $ (1.17) Net income (loss) per share - diluted $ 1.16 $ (1.14) $ (1.17) |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The table below sets forth certain unaudited statements of comprehensive income (loss) data, and net income (loss) per common share data, for each quarter of 2019 and 2018: (in thousands, except per share data) Quarter Ended March 31 June 30 September 30 December 31 (Unaudited) 2019 Revenues (1) $ 9,216 $ 9,682 $ 294,448 $ 8,727 Income (loss) from operations $ (17,469) $ (18,545) $ 224,676 $ (47,217) Net income (loss) $ (21,797) $ (23,018) $ 226,086 $ (51,138) Net income (loss) per common share, basic $ (0.21) $ (0.22) $ 2.13 $ (0.48) Net income (loss) per common share, diluted $ (0.21) $ (0.22) $ 1.95 (0.48) Shares used in computing net income (loss) per common share, basic 106,054 106,272 106,272 106,272 Shares used in computing net income (loss) per common share, diluted 106,054 106,272 116,640 106,272 2018 Revenues $ 25,374 $ 13,798 $ 6,966 $ 17,071 Loss from operations $ (37,713) $ (30,272) $ (22,927) $ (12,367) Net loss $ (41,821) $ (34,549) $ (27,396) $ (16,782) Net loss per common share, basic and diluted $ (0.40) $ (0.33) $ (0.26) $ (0.16) Shares used in computing net loss per common share, basic and diluted 105,668 105,848 105,881 105,920 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Inventory, Raw Materials, Gross | $ 3,182 | $ 3,564 |
Inventory, Work in Process, Gross | 153 | 232 |
Inventory, Finished Goods, Gross | 908 | 884 |
Inventory, Gross | $ 4,243 | 4,680 |
Prior Year Reclass of Accrual | $ 5,700 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Concentration of Credit Risk (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Disclosure On Geographic Areas Revenue From External Customers Attributed to France | 18.00% | ||
Disclosure on Geographic Areas, Revenue from External Customers Attributed to Entity's Country of Domicile, Percent | 10.00% | 40.00% | 17.00% |
Disclosure On Geographic Areas Revenue From External Customers Attributed to Germany | 89.00% | 53.00% | 65.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Segment Information and Signficant Customers (Details) - segment | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Number of operating segments | 1 | ||
Entity Wide Revenue Sanofi Percentage | 89.00% | 53.00% | 65.00% |
Biologics customer concentration | 25.00% | ||
LXRX Diplomat customer concentration | 14.00% | ||
Entity Wide Revenue Ipsen Percentage | 18.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Intangible asset (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | $ 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 1,766 | |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 10,886 | |
Finite-Lived Intangible Assets, Net | $ 19,716 | |
XERMELO Intangible Assets Finite Lived | $ 24,700 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Property and Equipment (Details) | 1 Months Ended | 12 Months Ended |
Aug. 31, 2018 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of assets | 10 years | |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of assets | 3 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of assets | 40 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies Impairment of Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | |
Asset Impairment Charges | $ 0 | 0 | 0 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 28,638 | $ 0 | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Cost of Sales (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Periot to reflect a lower average per unit cost of materials | 12 months |
In-Process Research and Development | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 14 years |
Summary of Significant Accou_12
Summary of Significant Accounting Policies Stock-Based Compensation (Details 1) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Outstanding, Weighted Average Remaining Vesting Period | 1 year 1 month 6 days | ||
Equity Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Employees | 4 years | 4 years | 4 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Employee | 2.20% | 2.60% | 1.70% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected VolatilityRate, Employees | 88.00% | 58.00% | 61.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate, Employees | 0.00% | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Officers and Non-employee Directors | 2.60% | 2.80% | 2.20% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Officers and Non-employee Directors | 77.00% | 63.00% | 70.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate, Officers and Non-employee Directors | 0.00% | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Officers and Non-employee Directors | 8 years | 8 years | 8 years |
Summary of Significant Accou_13
Summary of Significant Accounting Policies Stock-based Compensation (Details 2) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Accounting Policies [Abstract] | |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 24 |
Employee Service Share-based Compensation, Outstanding, Weighted Average Remaining Vesting Period | 1 year 1 month 6 days |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use assets | $ 1,700 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use assets | $ 2,100 | |
Lease liabilities | $ 2,100 |
Cash and Cash Equivalents and_3
Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents | ||
Realized Investment Gains (Losses) | $ 0 | |
Cash | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 36,112 | $ 80,386 |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 0 | 0 |
Available-for-sale Securities, Gross Unrealized Losses | 0 | 0 |
Available-for-sale Securities, Current | 36,112 | 80,386 |
US Treasury Securities | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 235,463 | 73,983 |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 94 | 0 |
Available-for-sale Securities, Gross Unrealized Losses | (10) | (9) |
Available-for-sale Securities, Current | 235,547 | 73,974 |
Corporate Debt Securities [Member] | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 5,695 | |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 0 | |
Available-for-sale Securities, Gross Unrealized Losses | (3) | |
Available-for-sale Securities, Current | 5,692 | |
Short-term Investments | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 235,463 | 79,678 |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 94 | 0 |
Available-for-sale Securities, Gross Unrealized Losses | (10) | (12) |
Available-for-sale Securities, Current | 235,547 | 79,666 |
Cash and Cash Equivalents and Investments | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 271,575 | 160,064 |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 94 | 0 |
Available-for-sale Securities, Gross Unrealized Losses | (10) | (12) |
Available-for-sale Securities, Current | $ 271,659 | $ 160,052 |
Fair Value Measurements (Detail
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 36,112 | $ 80,386 |
Available-for-sale Securities, Fair Value Disclosure | 235,547 | 79,666 |
Investments, Fair Value Disclosure | 271,659 | 160,052 |
Fair Value, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 36,112 | 80,386 |
Available-for-sale Securities, Fair Value Disclosure | 235,547 | 73,974 |
Investments, Fair Value Disclosure | 271,659 | 154,360 |
Fair Value, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Available-for-sale Securities, Fair Value Disclosure | 0 | 5,692 |
Investments, Fair Value Disclosure | 0 | 5,692 |
Fair Value, Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Available-for-sale Securities, Fair Value Disclosure | 0 | 0 |
Investments, Fair Value Disclosure | $ 0 | $ 0 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 10 years | ||
Property, Plant and Equipment, Gross | $ 75,788 | $ 75,871 | |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (61,741) | (60,006) | |
Net property and equipment | $ 14,047 | 15,865 | |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 40 years | ||
Computers and Software | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 4,587 | 4,557 | |
Computers and Software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 3 years | ||
Computers and Software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Furniture and Fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 5,629 | 5,644 | |
Furniture and Fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Furniture and Fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 7 years | ||
Laboratory Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 3,279 | 3,378 | |
Laboratory Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 3 years | ||
Laboratory Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 7 years | ||
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 417 | 416 | |
Leasehold Improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 3 years | ||
Leasehold Improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 7 years | ||
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 59,212 | 59,212 | |
Buildings | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 15 years | ||
Buildings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 40 years | ||
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 2,664 | $ 2,664 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Tax Assets and Liabilities | |||
Deferred Tax Assets, Operating Loss Carryforwards | $ 193,270 | $ 206,789 | |
Deferred Tax Assets, Tax Credit Carryforwards, Research | 46,306 | 47,087 | |
Deferred Tax Assets, Tax Credit Carryforwards, Orphan Drug | 24,524 | 24,524 | |
Deferred Tax Assets, In Process Research and Development | 58,596 | 71,047 | |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost | 5,340 | 4,641 | |
Deferred Tax Assets, Deferred Income | 0 | 5,458 | |
Deferred Tax Assets, Section 163j_LXRX | 3,625 | ||
Deferred Tax Assets, Other | 5,533 | 6,044 | |
Deferred Tax Assets, Gross | 333,569 | 369,215 | |
Deferred Tax Liability Related to Acquisition of Symphony Icon | (4,140) | (10,525) | |
Deferred Tax Liabilities, Other | (3) | (2) | |
Deferred Tax Liabilities, Gross | (4,143) | (10,527) | |
Deferred Tax Assets, Valuation Allowance | (329,426) | (364,702) | |
Deferred Tax Liabilities, Net | 0 | (6,014) | |
Income Tax Benefit | $ (6,014) | $ 0 | $ (12,661) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 27, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Deferred Tax Liability from Reclassified Intangible Asset | $ 8,700 | |||
Deferred Tax Liability from Reclassified Indefinite-lived Intangible | $ 4,000 | |||
Income Tax Benefit | $ (6,014) | $ 0 | $ (12,661) | |
Valuation Allowance, Deferred Tax Asset, Change in Amount | 35,300 | |||
Operating Loss Carryforwards, Federal | 879,700 | |||
Operating Loss Carryforwards, State | 83,000 | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 0 | 0 | ||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Deferred Tax Liability Related to Acquisition of Symphony Icon | 4,140 | 10,525 | ||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 46,306 | $ 47,087 | ||
Federal Net Operating Loss Change | $ 62,200 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current State and Local Tax Expense (Benefit) | $ 445 | $ (809) | $ (2,324) |
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-based Payment Arrangement, Amount | 1,688 | 1,059 | 1,447 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Research and Development, Amount | 0 | (978) | (1,993) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | (35,276) | 25,928 | (126,634) |
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | 26,065 | (25,315) | (47,479) |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 0 | 0 | 169,464 |
Effective Income Tax Rate Reconciliation Symphony Icon FV Adjustment | 0 | 0 | 735 |
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount | 0 | 0 | (189) |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 1,064 | 115 | (372) |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Other, Amount | 0 | 0 | (5,316) |
Income Tax Benefit | $ (6,014) | $ 0 | $ (12,661) |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 21.00% | 21.00% | 35.00% |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | Jul. 30, 2010 | Jul. 12, 2001 |
Goodwill [Abstract] | ||
Coelacanth Goodwill | $ 25.8 | |
Coelacanth Purchase Price | $ 36 | |
Symphony Icon Goodwill | $ 18.7 |
Debt Obligations - Narrative (D
Debt Obligations - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2018USD ($) | Dec. 31, 2017 | Nov. 30, 2014USD ($) | Dec. 31, 2019USD ($)$ / shares | Aug. 30, 2018USD ($) | Dec. 18, 2017USD ($) | |
Debt Instrument | ||||||
Proceeds from Convertible Debt | $ 87,500,000 | |||||
Convertible Debt Instrument Interest Rate Stated Percentage | 5.25% | |||||
Debt Instrument, Convertible, Conversion Ratio | 118.4553 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 8.442 | |||||
Repurchase price | 100.00% | |||||
Debt Issuance Cost | $ 3,400,000 | |||||
Debt instrument, term | 2 years | 5 years | 7 years | |||
Unamortized Debt Issuance Expense | $ 900,000 | |||||
Debt Instrument, Fair Value Disclosure | 64,800,000 | |||||
Recognition of gain or loss on extinguishment | $ 0 | |||||
Mortgage Debt Instrument_Revere_LXRX | $ 12,900,000 | |||||
Estimated useful life of assets | 10 years | |||||
Mortgage Debt Interest Rate_Base_Revere_LXRX | 5.50% | |||||
Mortgage Debt Balloon Payment_LXRX | $ 10,300,000 | |||||
Mortgage Debt Issue Costs_Revere_LXRX | $ 100,000 | $ 400,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | |||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | $ 11,000,000 | |||||
Buildings Collateral | 59,200,000 | |||||
Land Collateral | 2,700,000 | |||||
Debt Instrument, Face Amount | $ 150,000,000 | |||||
Debt Issuance Costs, Gross | $ 2,400,000 | $ 4,100,000 | ||||
Mortgage Debt Interest Rate BasePlus_Revere_LXRX | 7.50% |
Debt Obligations (Details 1)
Debt Obligations (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Obligations [Abstract] | ||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 11,130 | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 87,500 | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 150,000 | |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 0 | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 0 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 0 | |
Long-term Debt, Gross | 248,630 | |
Unamortized Debt Issuance Expense | (3,447) | |
Long-term Debt, Current Maturities | (11,012) | $ (1,115) |
Long-term Debt, Excluding Current Maturities | $ 234,171 | $ 243,887 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Minimum | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Payment period | 6 months |
Maximum | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Payment period | 12 months |
Commitments and Contingencies_2
Commitments and Contingencies (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Commitments and Contingencies [Abstract] | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 620 |
Operating Leases, Future Minimum Payments, Due in Two Years | 632 |
Operating Leases, Future Minimum Payments, Due in Three Years | 645 |
Operating Leases, Future Minimum Payments, Due in Four Years | 0 |
Operating Leases, Future Minimum Payments, Due in Five Years | 0 |
Operating Leases, Future Minimum Payments, Due Thereafter | 0 |
Operating Leases, Future Minimum Payments Due | 1,897 |
Interest on Lease Payments | (242) |
Present Value of Future Lease Payments | 1,655 |
Short-term Lease Commitment, Amount | (553) |
Long-term Debt and Lease Obligation | 1,102 |
Right-of-use assets | $ 1,700 |
Equity Incentive Awards - Narra
Equity Incentive Awards - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Option Exercise Price as Percent of Value of Common Stock | 100.00% |
Total Shares That May be Issued, Equity Incentive Plan | 20,000,000 |
Options Outstanding, Equity Incentive Plan | 7,456,905 |
Restricted Stock Units Outstanding, Equity Incentive Plan | 2,801,928 |
Stock Options Exercised, Equity Incentive Plan | 1,909,515 |
Shares Issued Pursuant to Restricted Stock Units, Equity Incentive Plan | 1,968,979 |
Shares Issued Pursuant to Stock Bonus Awards, Equity Incentive Plan | 113,940 |
Total value of shares by nonemployee in a year | $ | $ 500,000 |
Total Shares That May Be Issued, Non-Employee Directors Equity Incentive Plan | 600,000 |
Options Outstanding, Non-Employee Directors Equity Incentive Plan | 237,850 |
Stock Options Exercised, Non-Employee Directors Equity Incentive Plan | 0 |
Shares Issued Pursuant to Restricted Stock Awards, Non-Employee Directors Equity Incentive Plan | 103,208 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 10,524,411 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 5,979,947 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Award term | 10 years |
Restricted Stock | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Restricted Stock | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Equity Incentive Awards (Detail
Equity Incentive Awards (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 3.18 | $ 5.63 | $ 8.59 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value | $ 0.2 | $ 2 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 9 months 18 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 5 years 3 months 18 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0.2 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 7,695 | 6,152 | 4,961 | 4,834 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 8.95 | $ 10.68 | $ 11.17 | $ 11.24 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,435 | 1,916 | 892 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 5.06 | $ 10 | $ 14.31 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | (97) | (458) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0 | $ 7.55 | $ 11.97 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (212) | (239) | (157) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ 9.95 | $ 14.21 | $ 26.42 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (680) | (389) | (150) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 10.42 | $ 12.04 | $ 13.84 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 4,275 | 3,620 | 3,077 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 10.56 | $ 10.72 | $ 10.95 |
Equity Incentive Awards (Deta_2
Equity Incentive Awards (Details 3) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based Compensation Arrangement by Share-based Payment Award, Stock Bonus and Restricted Stock, Grants in Period | 27,728 | 20,512 | 10,248 |
Share-based Compensation Arrangement by Share-based Payment Award, Stock Bonus and Restricted Stock to Consultants, Grants in Period, Weighted Average Grant Date Fair Value | $ 5.67 | $ 7.80 | $ 15.61 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 2,900 | $ 3,300 | $ 4,700 |
Equity Incentive Awards (Deta_3
Equity Incentive Awards (Details 4) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 2,830 | 1,286 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 6.35 | $ 10.17 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 2,446 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 5.05 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (517) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 9.60 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (385) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period, Weighted Average Fair Value | $ 6.50 |
Benefit Plan (Details)
Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Benefit Plan [Abstract] | |||
Defined Contribution Plan, Cost | $ 1.2 | $ 1 | $ 1 |
Years of service | 4 years |
Collaboration and License Agr_2
Collaboration and License Agreements (Details) $ in Thousands, € in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2020USD ($) | Oct. 31, 2018USD ($) | Nov. 30, 2017USD ($) | Oct. 31, 2017USD ($) | Aug. 31, 2016USD ($) | Nov. 30, 2015USD ($)milestone | Oct. 31, 2014USD ($) | Oct. 31, 2014EUR (€) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Collaboration and License Agreements [Abstract] | ||||||||||||
Sanofi Upfront Payment | $ 300,000 | |||||||||||
Sanofi Development Milestones | $ 110,000 | |||||||||||
Number of development milestones | milestone | 4 | |||||||||||
Sanofi Regulatory Milestones | $ 220,000 | |||||||||||
Number of regulatory milestones | milestone | 4 | |||||||||||
Sanofi Outcomes Study Milestone | $ 100,000 | |||||||||||
Sanofi Sales Milestone Payments | $ 990,000 | |||||||||||
Number of commercial milestones | milestone | 6 | |||||||||||
Royalties percentage | 40.00% | |||||||||||
Funded commercialization costs | 40.00% | |||||||||||
Development costs period | 3 years | |||||||||||
Sanofi Development Costs Funded by Lexicon Maximum Amount | $ 100,000 | |||||||||||
Expiration period | 10 years | |||||||||||
Sanofi Revenue Allocated to Development Deliverable | $ 113,800 | |||||||||||
Sanofi Revenue Allocated to License Deliverable | 126,800 | |||||||||||
Sanofi Revenue Recognized | $ 286,000 | $ 33,200 | $ 60,100 | |||||||||
Sanofi Revenue Allocated to Funding Deliverable | $ 59,400 | |||||||||||
Ipsen Total Payments To Date | 47,200 | |||||||||||
Ipsen Total Upfront Payments | $ 24,500 | |||||||||||
Ipsen Milestone Payment Received | $ 1,300 | $ 3,800 | $ 3,800 | $ 6,400 | $ 5,100 | |||||||
Ipsen Revenue Allocated to License Deliverable | 21,200 | 1,400 | ||||||||||
Ipsen Maximum Regulatory And Commercial Milestones | 9,600 | |||||||||||
Ipsen Revenue Allocated to Development Deliverable | 1,700 | |||||||||||
Ipsen Revenue Allocated to Committee Deliverable | $ 100 | |||||||||||
Ipsen Revenue Recognized | 4,900 | 4,600 | $ 16,200 | |||||||||
Ipsen Royalty Income_LXRX | 300 | 100 | ||||||||||
Ipsen product sales | 1,600 | $ 800 | ||||||||||
Ipsen Maximum Sales Milestones | € | € 72 | |||||||||||
Settlement Payment from Termination | 208,000 | |||||||||||
Settlement Payment Obligation | 26,000 | |||||||||||
Sanofi Termination Agreement | 260,000 | |||||||||||
Sanofi Deferred Revenue from Termination | 23,500 | |||||||||||
Subsequent Event [Line Items] | ||||||||||||
Settlement Payment from Termination | $ 208,000 | |||||||||||
Subsequent Event | ||||||||||||
Collaboration and License Agreements [Abstract] | ||||||||||||
Settlement Payment from Termination | $ 26,000 | |||||||||||
Subsequent Event [Line Items] | ||||||||||||
Settlement Payment from Termination | $ 26,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net Income (Loss) Attributable to Parent | $ (51,138) | $ 226,086 | $ (23,018) | $ (21,797) | $ (16,782) | $ (27,396) | $ (34,549) | $ (41,821) | $ 130,133 | $ (120,548) | $ (122,993) |
Debt Instrument, Convertible, If-converted Value in Excess of Principal | $ 5,067 | $ 0 | $ 0 | ||||||||
Shares used in computing net loss per common share, basic and diluted | 105,920,000 | 105,881,000 | 105,848,000 | 105,668,000 | |||||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 164,000 | 0 | 0 | ||||||||
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | 10,365,000 | 0 | 0 | ||||||||
Weighted Average Number of Shares Outstanding, Diluted | 106,272,000 | 116,640,000 | 106,272,000 | 106,054,000 | 116,747,000 | 105,830,000 | 105,237,000 | ||||
Earnings Per Share, Basic | $ (0.48) | $ 2.13 | $ (0.22) | $ (0.21) | $ 1.23 | $ (1.14) | $ (1.17) | ||||
Earnings Per Share, Diluted | $ (0.48) | $ 1.95 | $ (0.22) | $ (0.21) | $ 1.16 | $ (1.14) | $ (1.17) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,206,390 | 7,438,134 | 5,907,643 | ||||||||
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities | $ 135,200 | $ (120,548) | $ (122,993) | ||||||||
Weighted Average Number of Shares Issued, Basic | 106,272,000 | 106,272,000 | 106,272,000 | 106,054,000 | 106,218,000 | 105,830,000 | 105,237,000 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Financial Statements, Captions | |||||||||||
Revenues | $ 8,727 | $ 294,448 | $ 9,682 | $ 9,216 | $ 17,071 | $ 6,966 | $ 13,798 | $ 25,374 | $ 322,073 | $ 63,209 | $ 91,689 |
Income (Loss) From Operations | (47,217) | 224,676 | (18,545) | (17,469) | (12,367) | (22,927) | (30,272) | (37,713) | 141,445 | (103,279) | (130,624) |
Net loss | $ (51,138) | $ 226,086 | $ (23,018) | $ (21,797) | $ (16,782) | $ (27,396) | $ (34,549) | $ (41,821) | $ 130,133 | $ (120,548) | $ (122,993) |
Earnings Per Share, Basic and Diluted | $ (0.16) | $ (0.26) | $ (0.33) | $ (0.40) | |||||||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 105,920 | 105,881 | 105,848 | 105,668 | |||||||
Weighted Average Number of Shares Issued, Basic | 106,272 | 106,272 | 106,272 | 106,054 | 106,218 | 105,830 | 105,237 | ||||
Weighted Average Number of Shares Outstanding, Diluted | 106,272 | 116,640 | 106,272 | 106,054 | 116,747 | 105,830 | 105,237 | ||||
Earnings Per Share, Diluted | $ (0.48) | $ 1.95 | $ (0.22) | $ (0.21) | $ 1.16 | $ (1.14) | $ (1.17) | ||||
Earnings Per Share, Basic | $ (0.48) | $ 2.13 | $ (0.22) | $ (0.21) | $ 1.23 | $ (1.14) | $ (1.17) |