Cover Page
Cover Page - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2020 | Mar. 06, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
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 | $ 82,000 | ||
Documents Incorporated by Reference | Certain sections of the registrant’s definitive proxy statement relating to the registrant’s 2021 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, 2020, 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 | 144,354,161 | ||
ICFR Auditor Attestation Flag | true | ||
Document Information | |||
ICFR Auditor Attestation Flag | true | ||
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets, Current [Abstract] | ||
Cash and cash equivalents | $ 126,263 | $ 36,112 |
Short-term investments | 26,012 | 235,547 |
Accounts receivable, net of allowances of $4 | 395 | 56,532 |
Inventory | 0 | 4,243 |
Prepaid expenses and other current assets | 5,049 | 5,320 |
Total current assets | 157,719 | 337,754 |
Property and equipment, net of accumulated depreciation and amortization of $61,741 and $60,006, respectively | 295 | 14,047 |
Goodwill | 44,543 | 44,543 |
Intangible assets, net | 0 | 19,716 |
Other assets | 1,231 | 1,655 |
Total assets | 203,788 | 417,715 |
Liabilities, Current [Abstract] | ||
Accounts payable | 5,469 | 12,178 |
Accrued liabilities | 29,691 | 42,151 |
Current portion of long-term debt, net of deferred financing costs | 11,646 | 11,012 |
Total current liabilities | 46,806 | 65,341 |
Long-term debt, net of deferred financing costs | 0 | 234,171 |
Other long-term liabilities | 611 | 1,102 |
Total liabilities | 47,417 | 300,614 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
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 | 142 | 106 |
Additional paid-in capital | 1,561,096 | 1,462,172 |
Accumulated deficit | (1,400,018) | (1,341,444) |
Accumulated other comprehensive income (loss) | (6) | 84 |
Treasury stock, at cost, 407 and 236 shares, respectively | (4,843) | (3,817) |
Total stockholders' equity | 156,371 | 117,101 |
Total liabilities and equity | $ 203,788 | $ 417,715 |
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 |
Balance Sheet Parentheticals
Balance Sheet Parentheticals - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accumulated depreciation and amortization, property and equipment | $ 5,815 | $ 61,741 |
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 | 793 | 407 |
Common Stock | ||
Common stock, shares issued | 142,289 | 106,679 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Net product revenue | $ 23,404,000 | $ 32,331,000 | $ 26,583,000 |
Collaborative agreements | 33,000 | 289,231,000 | 36,271,000 |
Royalties and other revenue | 558,000 | 511,000 | 355,000 |
Total revenues | 23,995,000 | 322,073,000 | 63,209,000 |
Operating expenses: | |||
Cost of sales (including finite-lived intangible asset amortization) | 1,929,000 | 3,231,000 | 2,491,000 |
Research and development, including stock-based compensation of $6,376, $7,096 and $6,010 respectively | 153,621,000 | 91,924,000 | 100,243,000 |
Selling, general and administrative, including stock-based compensation of $6,898, $7,122 and $5,686, respectively | 47,230,000 | 56,835,000 | 63,754,000 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 1,600,000 | 0 | 0 |
Goodwill and Intangible Asset Impairment | 28,638,000 | ||
Total operating expenses | 204,380,000 | 180,628,000 | 166,488,000 |
Gain on sale of non-financial assets | 132,585,000 | 0 | 0 |
Income (loss) from operations | (47,800,000) | 141,445,000 | (103,279,000) |
Recognition of gain or loss on extinguishment | 1,003,000 | 0 | 0 |
Interest expense | (14,544,000) | (20,676,000) | (20,777,000) |
Interest and other income, net | 2,767,000 | 3,350,000 | 3,508,000 |
Net income (loss) before taxes | (58,574,000) | 124,119,000 | (120,548,000) |
Income tax benefit | 0 | 6,014,000 | 0 |
Net income (loss) | (58,574,000) | 130,133,000 | (120,548,000) |
Other comprehensive loss: | |||
Unrealized gain (loss) on investments | (90,000) | 96,000 | 210,000 |
Comprehensive loss | $ (58,664,000) | $ 130,229,000 | $ (120,338,000) |
Earnings Per Share, Basic | $ (0.53) | $ 1.23 | $ (1.14) |
Earnings Per Share, Diluted | $ (0.53) | $ 1.16 | $ (1.14) |
Weighted Average Number of Shares Outstanding, Diluted | 110,841 | 116,747 | 105,830 |
Weighted Average Number of Shares Issued, Basic | 110,841 | 106,218 | 105,830 |
Statements of Comprehensive Los
Statements of Comprehensive Loss Parentheticals (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based compensation expense associated with research and development expense | $ 6,376 | $ 7,096 | $ 6,010 |
Stock-based compensation expense associated with general and administrative expense | $ 6,898 | $ 7,122 | $ 5,686 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Treasury Stock |
Balance, shares at Dec. 31, 2017 | 105,711,000 | |||||
Balance, value at Dec. 31, 2017 | $ 68,265,000 | $ 106,000 | $ 1,435,526,000 | $ (1,365,241,000) | $ (222,000) | $ (1,904,000) |
Stock-based compensation | 11,696,000 | $ 0 | 11,696,000 | 0 | 0 | 0 |
Issuance of common stock under Equity Incentive Plans, shares | 451,000 | |||||
Issuance of common stock under Equity Incentive Plans, value | 732,000 | $ 0 | 732,000 | 0 | 0 | 0 |
Repurchase of common stock | (972,000) | 0 | 0 | 0 | 0 | 972,000 |
Net loss | (120,548,000) | 0 | 0 | (120,548,000) | 0 | 0 |
Unrealized gain (loss) on investments | 210,000 | $ 0 | 0 | 0 | 210,000 | 0 |
Balance, shares at Dec. 31, 2018 | 106,162,000 | |||||
Balance, value at Dec. 31, 2018 | (26,405,000) | $ 106,000 | 1,447,954,000 | (1,471,577,000) | (12,000) | (2,876,000) |
Adjustments for New Accounting Pronouncement | 14,212,000 | |||||
Stock-based compensation | 14,218,000 | $ 0 | 14,218,000 | 0 | 0 | 0 |
Issuance of common stock under Equity Incentive Plans, shares | 517,000 | |||||
Issuance of common stock under Equity Incentive Plans, value | 0 | $ 0 | 0 | 0 | 0 | 0 |
Repurchase of common stock | (941,000) | 0 | 0 | 0 | 0 | (941,000) |
Net loss | 130,133,000 | 0 | 0 | 130,133,000 | 0 | 0 |
Unrealized gain (loss) on investments | 96,000 | $ 0 | 0 | 0 | 96,000 | 0 |
Balance, shares at Dec. 31, 2019 | 106,679,000 | |||||
Balance, value at Dec. 31, 2019 | 117,101,000 | $ 106,000 | 1,462,172,000 | (1,341,444,000) | 84,000 | (3,817,000) |
Stock-based compensation | 13,274,000 | 0 | 13,274,000 | 0 | 0 | 0 |
Stock Issued During Period, Value, New Issues | 6,963,000 | $ 4,000 | 6,959,000 | 0 | 0 | 0 |
Stock Issued During Period, Shares, New Issues | 3,709,000 | |||||
Sale of Stock, Consideration Received Per Transaction | 63,007,000 | $ 20,000 | 62,987,000 | 0 | 0 | 0 |
Common stock, shares issued | 10,369,000 | |||||
Issuance of common stock under Equity Incentive Plans, shares | 1,219,000 | |||||
Issuance of common stock under Equity Incentive Plans, value | 2,000 | $ 2,000 | 0 | 0 | 0 | 0 |
Repurchase of common stock | (1,026,000) | 0 | 0 | 0 | 0 | (1,026,000) |
Net loss | (58,574,000) | 0 | 0 | (58,574,000) | 0 | 0 |
Unrealized gain (loss) on investments | (90,000) | $ 0 | 0 | 0 | (90,000) | 0 |
Balance, shares at Dec. 31, 2020 | 142,289,000 | |||||
Balance, value at Dec. 31, 2020 | $ 156,371,000 | $ 142,000 | 1,561,096,000 | (1,400,018,000) | (6,000) | (4,843,000) |
Sale of Stock, Number of Shares Issued in Transaction | 20,312,500 | 20,313,000 | ||||
Conversion of Stock, Amount Issued | $ 15,714,000 | $ 10,000 | $ 15,704,000 | $ 0 | $ 0 | $ 0 |
Share price in November 20 ATM Offering | 1.992 | |||||
Proceeds from Nov 2020 ATM Offering | 7,000,000 | |||||
Commissions from December 2020 Common Stock Offering | 1,800,000 | |||||
Offering expenses from December 20 common stock offering | 200,000 | |||||
ATM Offering Total | $ 50,000,000 | |||||
Other Capital Agreements | Other Capital Agreements Common Stock : In December 2020, Lexicon sold 20,312,500 shares of its common stock at a price of $3.200 per share in a registered direct offering pursuant to an existing shelf registration statement. Sale of the shares resulted in net proceeds of $63.0 million, after deducting underwriting discounts and commissions of $1.8 million and offering expenses of $0.2 million. The investors in the offering were Artal International S.C.A., an affiliate of of Invus, L.P., the Company’s largest stockholder, and BVF Partners L.P. and certain affiliates of BVF Partners L.P. All of the net proceeds of the registered direct offering are reflected as issuance of common stock in the accompanying financial statements. In October 2020, Lexicon entered into an Open Market Sale Agreement SM (the “sales agreement”) with Jefferies LLC (“Jefferies”) relating to the shares of its common stock. Lexicon may offer and sell common stock having an aggregate sales price of up to $50,000,000 from time to time through Jefferies acting as its sales agent. In November 2020, Lexicon sold 3,709,233 shares of its common stock at a price of $1.992 per share pursuant to the sales agreement, resulting in net proceeds of $7.0 million. The net proceeds from this sale are reflected as issuance of common stock in the accompanying financial statements. | |||||
Shares Issued, Price Per Share | $ 3.200 | |||||
Proceeds from December 2020 common stock offering | $ 63,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net loss | $ (58,574,000) | $ 130,133,000 | $ (120,548,000) |
Adjustments to reconcile consolidated net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 2,934,000 | 3,654,000 | 3,683,000 |
Stock-based compensation | 13,274,000 | 14,218,000 | 11,696,000 |
Loss on disposal of property and equipment | (707,000) | 0 | 0 |
Deferred tax benefit | 0 | (6,014,000) | 0 |
Changes in operating assets and liabilities: | |||
(Increase) decrease in accounts receivable | 53,227,000 | (50,608,000) | (1,099,000) |
Increase in inventories | 345,000 | 437,000 | (2,732,000) |
(Increase) decrease in prepaid expenses and other current assets | (1,948,000) | (2,652,000) | 1,766,000 |
(Increase) decrease in other assets | 424,000 | 429,000 | 144,000 |
Increase (decrease) in accounts payable and other liabilities | (20,969,000) | 20,097,000 | (19,913,000) |
Decrease in deferred revenue | 0 | (25,990,000) | (22,940,000) |
Net cash used in operating activities | (142,969,000) | 113,807,000 | (148,607,000) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (87,000) | (70,000) | (95,000) |
Proceeds from Sale of Productive Assets | 160,385,000 | 0 | 0 |
Proceeds from Sale of Property, Plant, and Equipment | 11,013,000 | ||
Purchases of investments | (58,555,000) | (322,385,000) | (119,987,000) |
Maturities of investments | 268,000,000 | 166,600,000 | 289,658,000 |
Net cash provided by investing activities | 380,756,000 | (155,855,000) | 169,576,000 |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock, net of fees | 69,970,000 | 0 | 732,000 |
Repurchase of common stock | (1,026,000) | (941,000) | (972,000) |
Proceeds from debt borrowings, net of fees | 0 | 0 | 12,529,000 |
Repayment of debt borrowings | (216,580,000) | (1,285,000) | (14,533,000) |
Net cash provided by (used in) financing activities | (147,636,000) | (2,226,000) | (2,244,000) |
Net increase (decrease) in cash and cash equivalents | 90,151,000 | (44,274,000) | 18,725,000 |
Cash and cash equivalents at beginning of year | 36,112,000 | 80,386,000 | 61,661,000 |
Cash and cash equivalents at end of year | 126,263,000 | 36,112,000 | 80,386,000 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 17,353,000 | 19,211,000 | 16,465,000 |
Supplemental disclosure of noncash investing and financing activities: | |||
Common stock, $.001 par value; 225,000 shares authorized; 106,679 and 106,162 shares issued, respectively | 15,714,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 3,437,000 | ||
Amortization of debt issuance costs | 1,013,000 | 1,465,000 | 1,336,000 |
Gain on sale of non-financial assets | (132,585,000) | 0 | 0 |
Impairment of Real Estate | 1,600,000 | 0 | 0 |
Asset Impairment Charges | 0 | 28,638,000 | 0 |
Recognition of gain or loss on extinguishment | (1,003,000) | 0 | 0 |
Proceeds from Sale of Buildings | $ 11,900,000 | $ 0 | $ 0 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2020 | |
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, the success of its ongoing nonclinical and clinical development efforts and its ability to obtain necessary regulatory approvals of the drug candidates which are the subject of such efforts; TerSera’s ability to successfully develop and commercialize XERMELO for biliary tract cancer and the Company’s receipt of milestone payments and royalties from such efforts; its success in establishing new collaborations and licenses; the amount and timing of research, development and commercialization expenditures; its resources devoted to developing and supporting its products; 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, 2020 | |
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. 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, 2020 and December 31, 2019, 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, net of an allowance for expected credit losses. Inventory: Inventory was comprised of supplies of XERMELO supporting the Company’s commercialization of the product in the United States. Inventories were determined at the lower of cost or market value, with cost determined under the specific identification method. As of December 31, 2019, inventory in the accompanying consolidated balance sheet consisted of raw materials, work in process and finished goods in the amounts of $3.2 million, $0.2 million and $0.9 million, respectively. See Note 4, Asset Sale, for additional information relating to inventory. 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 2020, customers in the United States represented 98% of revenue. In 2019, customers in Germany and the United States represented 89% and 10%, respectively. In 2018, customers in Germany and the United States represented 53% and 40% of revenue, respectively. At December 31, 2020, 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 2020, two specialty pharmacies, Biologics, Inc. and Diplomat Pharmacy, represented 65% and 22% of revenues, respectively. In 2019, Sanofi represented 89% of revenues and no individual XERMELO customer represented more than 10% of revenues. In 2018, Sanofi represented 53% of revenues and Biologics, Inc. and Diplomat Pharmacy, represented 25% and 14% of revenues, respectively. Intangible Assets: Intangible assets, net consist of in-process research and development acquired in business combinations, and 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. As of December 31, 2019, the net carrying value of the finite-lived intangible assets was $19.7 million. During 2020, the remaining net carrying value of $18.5 million for the intangible assets relating to XERMELO was reduced to zero as a result of the sale of XERMELO and related assets to TerSera Therapeutics LLC and is included in Gain on sale of XERMELO in the accompanying consolidated statement of income (loss). 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 Accrued liabilities: Accrued liabilities consisted of the following: As of December 31, 2020 2019 (in thousands) Accrued research and development services $ 21,962 $ 29,033 Accrued compensation and benefits 6,200 9,644 Short term lease liability 553 553 Other 976 2,921 Accrued liabilities $ 29,691 $ 42,151 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 considereds 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. In 2020, we recognized an impairment loss of $1.6 million to reduce the carrying value of the assets comprising our campus in The Woodlands, Texas, which were sold in December 2020, to an estimated fair value, less estimated selling costs. There were no impairments of long-lived assets, including finite-lived intangible assets, in 2019 or 2018. 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. In 2019, Lexicon determined that a triggering event occurred upon execution of the Termination Agreement with Sanofi (as defined in Note 14) 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 in 2019. The impairment reduced the remaining book value to zero. There was no impairment of indefinite-lived intangible assets in 2018. 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 2020, 2019 or 2018. Revenue Recognition: Product Revenues Prior to the Company’s sale of XERELO and related assets to TerSera in September 2020, product revenues consisted of commercial sales of XERMELO in the United States and sales of bulk tablets of XERMELO to Ipsen. Product revenues were recognized when the customer obtains control of the Company’s product, which occurs upon delivery to the customer. The Company recognized 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 were 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 were considered a fulfillment activity when control transfers to the Company’s customers and such costs were included in cost of sales. Customer Credits: The Company’s customers were offered various forms of consideration, including allowances, service fees and prompt payment discounts. The Company expected that its customers would earn prompt payment discounts. As a result, the Company deducted the full amount of those discounts from total product sales when revenues were recognized. Service fees were also deducted from product sales as they were 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 were based on third party market research data and data received from the specialty pharmacies. Rebates were generally invoiced and paid in arrears so that the accrual balance consisted 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 varied from estimates, the Company adjusted prior period accruals, which affected 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 consisted 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, charged 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 was 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 were based on data received from the specialty pharmacies and projections based on historical data. Funding of the coverage gap was generally invoiced and paid in arrears so that the accrual balance consisted 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 varied from estimates, the Company adjusted prior period accruals, which affected 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 accrued 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 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 consisted of third-party manufacturing costs, freight and indirect overhead costs associated with sales of XERMELO. Product shipping and handling costs were included in cost of sales. Cost of sales also included 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 the development of sotagliflozin for type 2 diabetes and heart failure, as well as the wind down of those activities, were based on estimates of the services to be received and efforts to be expended pursuant to contracts with multiple vendors and the CRO that conducted and managed 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, 2020, stock-based compensation cost for all outstanding unvested options and restricted stock units was $15.7 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, 2020, 2019 and 2018, respectively: Expected Volatility Risk-free Interest Rate Expected Term Dividend December 31, 2020: Employees 98% 1.3% 4 0 % Officers and non-employee directors 85% 1.4% 7 0 % 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 % 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 2020, the Company reassessed the valuation allowance and considered negative evidence, including the cumulative losses over the three years ended December 31, 2020, and positive evidence, including the income during the year ended December 31, 2020 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, 2020 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 $309.0 million at December 31, 2020. 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. 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, 2020 | |
Recent Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Recent Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 adoption of this ASU did not 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 adoption of this ASU did not have a material impact on the consolidated financial statements. |
Cash and Cash Equivalents and I
Cash and Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents and Investments [Abstract] | |
Cash and Cash Equivalents and Investments | Cash, Cash Equivalents and Investments The fair value of cash and cash equivalents and investments held at December 31, 2020 and 2019 are as follows: As of December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 126,263 $ — $ — $ 126,263 Securities maturing within one year: Corporate debt securities 26,018 5 (11) 26,012 Total short-term investments $ 26,018 $ 5 $ (11) $ 26,012 Total cash and cash equivalents and investments $ 152,281 $ 5 $ (11) $ 152,275 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 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019. Assets and Liabilities at Fair Value As of December 31, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 126,263 $ — $ — $ 126,263 Short-term investments — 26,012 — 26,012 Total cash and cash equivalents and investments $ 126,263 $ 26,012 $ — $ 152,275 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 The Company did not have any Level 3 assets or liabilities at December 31, 2020 or 2019. 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, 2020 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment at December 31, 2020 and 2019 are as follows: Estimated Useful Lives As of December 31, In Years 2020 2019 (in thousands) Computers and software 3-5 $ 3,826 $ 4,587 Furniture and fixtures 5-7 1,867 5,629 Laboratory equipment 3-7 — 3,279 Leasehold improvements 3-7 417 417 Buildings 15-40 — 59,212 Land — — 2,664 Total property and equipment 6,110 75,788 Less: Accumulated depreciation and amortization (5,815) (61,741) Net property and equipment $ 295 $ 14,047 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States to provide emergency assistance to individuals and businesses affected by the COVID-19 pandemic. The CARES Act includes temporary changes to both income and non-income based tax laws. For the year ended December 31, 2020 the impact of the CARES Act was immaterial to the Company’s tax provision. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. 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, 2020 and 2019 are as follows: As of December 31, 2020 2019 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 201,610 $ 193,270 Research and development tax credits 29,304 46,306 Orphan drug credits 24,524 24,524 Capitalized research and development 47,075 58,596 Stock-based compensation 5,651 5,340 Other 844 5,533 Total deferred tax assets 309,008 333,569 Deferred tax liabilities: Deferred tax liability related to acquisition of Symphony Icon — (4,140) Other — (3) Total deferred tax liabilities — (4,143) Less: valuation allowance (309,008) (329,426) Net deferred tax liabilities $ — $ — A reconciliation of the statutory tax rate to the effective tax rate for the years ended December 31, 2020, 2019 and 2018 consists of the following: Year Ended December 31, 2020 2019 2018 (in thousands) Expected income tax expense (benefit) at 21% $ (12,300) $ 26,065 $ (25,315) State income taxes, net of federal benefit (269) 445 (809) Equity compensation 1,777 1,688 1,059 Research and development credit — — (978) Write off of credit carryover due to 382 study 31,053 — — Change in valuation allowance (20,418) (35,276) 25,928 Other (1) 157 1,064 115 Income tax benefit $ — $ (6,014) $ — (1) Other is primarily comprised of expiring Research and Development credits for the years ended December 31, 2019 and nondeductible expenses for the years ended December 31, 2020 and 2018. Section 382 of the Internal Revenue Code of 1986, contains rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss and tax credit carryovers and certain built-in losses recognized in years after the “ownership change.” An “ownership change” is generally defined as any change in ownership of more than 50% of a corporation’s stock over a rolling three-year period by stockholders that own (directly or indirectly) 5% or more of the stock of a corporation, or arising from a new issuance of stock by a corporation. If an ownership change occurs, Section 382 generally imposes an annual limitation on the use of pre-ownership change net operating loss carryovers to offset taxable income earned after the ownership change. The Company completed a Section 382 study and determined that historical ownership changes occurred. The Section 382 annual limitation related to historical ownership changes impacts our ability to utilize our tax attributes. In 2020, the federal deferred tax assets and valuation allowance decreased due to the write-off of attributes that will expire still subject to limitation. At December 31, 2020, Lexicon had both federal and state NOL carryforwards of approximately $918.1 million and $86.9 million, respectively. In 2020, federal NOLs increased by $38.4 million primarily related to a current year NOL partially offset by $66.9 million decrease in historical NOLs which will expire still subject to Section 382 limitation. The state NOL carryforwards increased 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 2024. In 2020, the Company’s R&D tax credit carryforwards decreased by $17.0 million due to Section 382 limitations to approximately $29.3 million which will begin to expire in 2027. Based on the federal tax law limits and the Company’s cumulative loss position, the Company 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, 2020, the valuation allowance decreased $20.4 million, primarily due to decreases in deferred tax assets associated with attributes subject to IRC 382 limitation and capitalized research and development expenses partially offset by NOLs generated in the current year and the reversal of the deferred tax liability related to the acquisition of Symphony Icon. 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 years ended December 31, 2020 and 2018, respectively. As of December 31, 2020 and 2019, 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 1999 to current remain open to examination by U.S. federal authorities and 2012 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 expense. As of December 31, 2020 and 2019, the Company had no accruals for interest or penalties related to income tax matters. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 | |
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. In 2020, the Company entered into separate, privately negotiated exchange agreements to exchange $75.8 million aggregate principal amount of the Convertible Notes for consideration valued at 85% of the principal amount of the Convertible Notes. In 2020, the Company issued 10,368,956 shares of the Company’s common stock and paid $50.0 million in cash, which included $1.3 million of accrued interest, to exchange such Convertible Notes. The Company recorded the exchanges under the accounting requirements for debt extinguishment of convertible instruments. As a result, a debt extinguishment gain of $9.6 million was recorded and is included in the accompanying consolidated statement of comprehensive income (loss) for the year ended December 31, 2020. As of December 31, 2020, the carrying value of the remaining Convertible Notes was $11.6 million. The remaining 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 remaining Convertible Notes was $9.2 million as of December 31, 2020 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 provided for a $12.9 million mortgage on the Property and had a two 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 was scheduled to mature in December 2022, bore interest at 9% per year, subject to additional interest if an event of default occurred and was continuing, and was payable quarterly. The BioPharma Term Loan was subject to mandatory prepayment provisions that required prepayment upon a change of control or receipt of proceeds from certain non-ordinary course transfers of assets. The Company repaid the BioPharma Term Loan in whole, together with required prepayment and make-whole premiums, upon closing of the XERMELO Sale in September 2020. The Company recorded the repayment under the accounting requirements for debt extinguishment and as a result, a loss of $8.6 million was recognized and is included in the accompanying consolidated statement of comprehensive income (loss) for the year ended December 31, 2020. The Company’s obligations under the BioPharma Term Loan were 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 contained 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 occurred and was continuing, all amounts outstanding under the BioPharma Term Loan may have been declared immediately due and payable. five |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease Obligations : A wholly-owned subsidiary of Lexicon 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 of December 31, 2020, the office space lease right-of-use (ROU) asset had a balance of $1.2 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 $0.6 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 with a term of 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, 2020: (in thousands) 2021 $ 632 2022 645 2023 — 2024 — 2025 — Thereafter — Total undiscounted operating lease liability 1,277 Less: amount of lease payments representing interest (113) Present value of future lease payments 1,164 Less: short-term operating lease liability (553) Long-term operating lease liability $ 611 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. Our motion to dismiss was granted and the action was dismissed with prejudice by the District Court on August 14, 2020. The lead plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit on September 11, 2020 and a brief in support of its appeal on December 17, 2020. The Company filed a response brief on February 18, 2021 and the lead plaintiffs filed a reply brief on March 11, 2021. 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. On October 16, 2020, Lexicon initiated arbitration proceedings against Sanofi-Aventis Deutschland GmbH, or Sanofi, seeking to recover damages for breach of contract relating to the Termination and Settlement Agreement and Mutual Releases with Sanofi, dated September 9, 2019. In September 2020, Sanofi withheld approximately $23.2 million from the final $26 million payment due to the Company under the termination and settlement agreement, offsetting certain third party costs and internal costs incurred by Sanofi and asserted by Sanofi to be payable by the Company under the terms of the termination and settlement agreement. Lexicon disputes that at least a significant portion of such costs are properly reimbursable by the Company under the terms of the termination and settlement agreement and assert that, in any event, Sanofi was not permitted to withhold any of such costs under the terms of the termination and settlement agreement. Lexicon is seeking payment of up to $23.2 million in such disputed costs, together with late interest and attorneys’ fees and costs. Sanofi is seeking a declaratory judgment that Lexicon is liable for all disputed costs previously withheld and damages for any additional costs properly reimbursable under the terms of the termination and settlement agreement in excess of those previously withheld, together with late interest and attorneys’ fees. 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, 2020 | |
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 30,000,000 shares at December 31, 2020. In the first quarter of 2020, the Company amended the 2017 Equity Incentive Plan to increase the aggregate number of shares that may be issued under the plan to 30,000,000 shares. As of December 31, 2020, options to purchase 8,026,989 shares and 2,683,875 restricted stock units were outstanding, 1,909,515 shares had been issued upon the exercise of stock options, 3,160,935 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, 2020, stock options to purchase 369,917 shares were outstanding, none had been issued upon the exercise of stock options, 85,104 restricted stock units were outstanding and 130,936 shares had been issued pursuant to restricted stock and restricted stock unit awards granted under the Directors’ Plan. Stock Option Activity: The following is a summary of stock option activity under Lexicon’s equity incentive plans: 2020 2019 2018 (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 7,695 $ 8.95 6,152 $ 10.68 4,961 $ 11.17 Granted 3,495 3.24 2,435 5.06 1,916 10.00 Exercised — — — — (97) 7.55 Expired (236) 12.91 (212) 9.95 (239) 14.21 Forfeited (2,557) 6.78 (680) 10.42 (389) 12.04 Outstanding at end of year 8,397 7.12 7,695 8.95 6,152 10.68 Exercisable at end of year 4,684 $ 9.48 4,275 $ 10.56 3,620 $ 10.72 The weighted average estimated grant date fair value of stock options granted during the years ended December 31, 2020, 2019 and 2018 were $2.35, $3.18 and $5.63, respectively. The total intrinsic value of stock options exercised during the year ended December 31, 2018 was $0.2 million. The weighted average remaining contractual term of stock options outstanding and exercisable was 6.8 and 5.2 years, respectively, as of December 31, 2020. At December 31, 2020, the aggregate intrinsic value of the outstanding stock options was $0.5 million. At December 31, 2020, the intrinsic value of exercisable stock options was zero. Stock Bonus and Restricted Stock Unit Activity: During the year ended December 31, 2020 and 2019, Lexicon granted its non-employee directors 85,104 and 27,728 restricted stock units, respectively, and during the year ended December 31, 2018, granted its non-employee directors 20,512 shares of restricted stock awards. The restricted stock in 2020, 2019 and 2018 had weighted average grant date fair values of $1.86, $5.67 and $7.80 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, 2020, 2019 and 2018, 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 The following is a summary of restricted stock units activity under Lexicon’s stock-based compensation plans for the year ended December 31, 2020: Shares Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2019 2,830 $ 6.35 Granted 3,144 3.27 Vested (1,219) 6.56 Forfeited (1,986) 4.13 Outstanding at December 31, 2020 2,769 $ 4.35 Aggregate Shares Reserved for Issuance As of December 31, 2020, an aggregate of 11,165,885 shares of common stock were reserved for issuance upon exercise of outstanding stock options and vesting of outstanding restricted stock units and 14,118,789 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, 2020 | |
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 $0.9 million, $1.2 million and $1.0 million in the years ended December 31, 2020, 2019 and 2018, respectively. Company contributions are vested based on the employee’s years of service, with full vesting after four years of service. |
Collaboration and License Agree
Collaboration and License Agreements | 12 Months Ended |
Dec. 31, 2020 | |
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. 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”). The Ipsen Agreement was assigned to TerSera in September 2020 in connection with the XERMELO sale. 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 had 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 were to be allocated between the parties based on the nature of such clinical trials. Under the Ipsen Agreement, Ipsen paid Lexicon an aggregate of $47.2 million through September 30, 2020, 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 was 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 that were contingent upon achievement of a substantive milestone were deemed constrained. Lexicon was 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 had entered into a commercial supply agreement pursuant to which Lexicon supplied Ipsen’s commercial requirements of XERMELO, and Ipsen paid 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 considered 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 recognized as revenue the amount allocated to the development services and the obligation to participate in committees over the period of time Lexicon performed services, which was completed in 2018. The Company determined that the commercial supply agreement was a contingent deliverable at the onset. There was inherent uncertainty in obtaining regulatory approval at the time and entry into the commercial supply agreement, thus making the applicability of the commercial supply agreement outside the control of Lexicon and Ipsen. As a result, the Company determined the commercial supply agreement did not meet the definition of a performance obligation that needed to be accounted for at the inception of the arrangement. The Company also determined that there was no significant and incremental discount related to the commercial supply agreement that should have been 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. As a result of the allocation, the Company recognized $21.2 million of the $24.5 million upfront payment for the license in 2014, and an additional $1.4 million in 2015 upon entering into the amendment. The Company recognized the $1.7 million allocated to the development services deliverable over the estimated period of performance as development occurred, and recognized the $0.1 million allocated to the committee participation deliverable ratably over the period of performance. Milestone payments that were contingent upon the achievement of a substantive milestone were deemed constrained. If or when the constraint was determined to be resolved, the Company re-evaluated the overall transaction price and recognized an adjustment on a cumulative catch-up basis in the period that the adjustment was evaluated. Revenue recognized under the Agreement was $0.3 million, $4.9 million and $4.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. Revenue for each of the years ended December 31, 2020, 2019 and 2018 include $0.3 million of royalties from Ipsen. Revenue for the years ended December 31, 2020, 2019 and 2018 include zero, $1.3 million and $1.6 million, respectively, from sales of bulk tablets of XERMELO to Ipsen. 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 each of March and September 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 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. See Note 11, Commitments and Contingencies, for additional information. Beginning in March 2020, Lexicon closed out early the clinical studies related to the Phase 3 development program for sotagliflozin in type 2 diabetes, heart failure and chronic kidney disease. 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 would 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 had the right to 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 had the right to 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 was to perform for sotagliflozin relating to type 1 diabetes; and • The funding Lexicon was to 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 was then 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 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
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) 2020 2019 2018 Numerator: Net income (loss) $ (58,574) $ 130,133 $ (120,548) Add interest expense on Convertible Notes — 5,067 — Adjusted net income (loss) $ (58,574) $ 135,200 $ (120,548) Denominator: Shares used in computing net income (loss) per common share, basic 110,841 106,218 105,830 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 110,841 116,747 105,830 Net income (loss) per share - basic $ (0.53) $ 1.23 $ (1.14) Net income (loss) per share - diluted $ (0.53) $ 1.16 $ (1.14) 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 11,113,054, 8,206,390 and 7,438,134, respectively, for the years ended December 31, 2020, 2019 and 2018. 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. |
Asset Sale
Asset Sale | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Sale of Non-Financial Assets | Asset Sale In September 2020, the Company completed the sale of its XERMELO (telotristat ethyl) product and related assets (the “XERMELO sale”) to TerSera Therapeutics LLC (“TerSera”) pursuant to an Asset Purchase and Sale Agreement entered into in July 2020. The final consideration paid by TerSera was $160.0 million and the net gain recognized in connection with the XERMELO sale was $132.6 million. The gain is reflected on the consolidated statement of comprehensive income (loss) for the year ended December 31, 2020. The Company remains eligible to receive development, regulatory and sales milestone payments of up to an aggregate of $65.0 million for the development and commercialization of telotristat ethyl in patients with biliary tract cancer and mid-teens royalty payments on net sales of XERMELO in biliary tract cancer. The Company has determined that these amounts are constrained until the achievement, if any, of specific events. If or when the constraint is determined to be resolved, the Company will re-evaluate the overall gain in connection with the XERMELO sale and recognize an adjustment on a cumulative catch-up basis in the period that the determination is made. Such adjustment would be included in Gain on sale of XERMELO in the consolidated statement of comprehensive income (loss). The XERMELO sale did not meet the criteria for reporting discontinued operations as there was not a strategic shift that has (or will have) a major effect on the Company’s operations. For the years ended December 31, 2020, 2019 and 2018, the pretax net loss on the condensed consolidated statement of comprehensive income (loss) for the Company’s XERMELO operations is $12.2 million, $15.4 million and $33.7 million, respectively. As a result of the XERMELO sale, the Company implemented a reduction in force which reduced its workforce by approximately fifty percent. The Company incurred and recognized severance charges of approximate $5.5 million. Of this charge, $2.5 million was recorded in research and development expense and $3.0 million was recorded in selling, general and administrative expense in the accompanying consolidated statement of comprehensive income (loss) for the year ended December 31, 2020. |
Other Capital Agreements
Other Capital Agreements | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Other Capital Agreements | Other Capital Agreements Common Stock : In December 2020, Lexicon sold 20,312,500 shares of its common stock at a price of $3.200 per share in a registered direct offering pursuant to an existing shelf registration statement. Sale of the shares resulted in net proceeds of $63.0 million, after deducting underwriting discounts and commissions of $1.8 million and offering expenses of $0.2 million. The investors in the offering were Artal International S.C.A., an affiliate of of Invus, L.P., the Company’s largest stockholder, and BVF Partners L.P. and certain affiliates of BVF Partners L.P. All of the net proceeds of the registered direct offering are reflected as issuance of common stock in the accompanying financial statements. In October 2020, Lexicon entered into an Open Market Sale Agreement SM (the “sales agreement”) with Jefferies LLC (“Jefferies”) relating to the shares of its common stock. Lexicon may offer and sell common stock having an aggregate sales price of up to $50,000,000 from time to time through Jefferies acting as its sales agent. In November 2020, Lexicon sold 3,709,233 shares of its common stock at a price of $1.992 per share pursuant to the sales agreement, resulting in net proceeds of $7.0 million. The net proceeds from this sale are reflected as issuance of common stock in the accompanying financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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. |
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, 2020 and December 31, 2019, 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, net of an allowance for expected credit losses. |
Inventory, Policy [Policy Text Block] | Inventory: Inventory was comprised of supplies of XERMELO supporting the Company’s commercialization of the product in the United States. Inventories were determined at the lower of cost or market value, with cost determined under the specific identification method. As of December 31, 2019, inventory in the accompanying consolidated balance sheet consisted of raw materials, work in process and finished goods in the amounts of $3.2 million, $0.2 million and $0.9 million, respectively. See Note 4, Asset Sale, for additional information relating to inventory. |
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, and 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 Accrued liabilities: Accrued liabilities consisted of the following: As of December 31, 2020 2019 (in thousands) Accrued research and development services $ 21,962 $ 29,033 Accrued compensation and benefits 6,200 9,644 Short term lease liability 553 553 Other 976 2,921 Accrued liabilities $ 29,691 $ 42,151 |
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 considereds 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. In 2020, we recognized an impairment loss of $1.6 million to reduce the carrying value of the assets comprising our campus in The Woodlands, Texas, which were sold in December 2020, to an estimated fair value, less estimated selling costs. There were no impairments of long-lived assets, including finite-lived intangible assets, in 2019 or 2018. |
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 Prior to the Company’s sale of XERELO and related assets to TerSera in September 2020, product revenues consisted of commercial sales of XERMELO in the United States and sales of bulk tablets of XERMELO to Ipsen. Product revenues were recognized when the customer obtains control of the Company’s product, which occurs upon delivery to the customer. The Company recognized 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 were 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 were considered a fulfillment activity when control transfers to the Company’s customers and such costs were included in cost of sales. Customer Credits: The Company’s customers were offered various forms of consideration, including allowances, service fees and prompt payment discounts. The Company expected that its customers would earn prompt payment discounts. As a result, the Company deducted the full amount of those discounts from total product sales when revenues were recognized. Service fees were also deducted from product sales as they were 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 were based on third party market research data and data received from the specialty pharmacies. Rebates were generally invoiced and paid in arrears so that the accrual balance consisted 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 varied from estimates, the Company adjusted prior period accruals, which affected 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 consisted 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, charged 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 was 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 were based on data received from the specialty pharmacies and projections based on historical data. Funding of the coverage gap was generally invoiced and paid in arrears so that the accrual balance consisted 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 varied from estimates, the Company adjusted prior period accruals, which affected 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 accrued a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. |
Cost of Sales | Cost of Sales: Cost of sales consisted of third-party manufacturing costs, freight and indirect overhead costs associated with sales of XERMELO. Product shipping and handling costs were included in cost of sales. Cost of sales also included 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 the development of sotagliflozin for type 2 diabetes and heart failure, as well as the wind down of those activities, were based on estimates of the services to be received and efforts to be expended pursuant to contracts with multiple vendors and the CRO that conducted and managed 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, 2020, stock-based compensation cost for all outstanding unvested options and restricted stock units was $15.7 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. In 2019, Lexicon determined that a triggering event occurred upon execution of the Termination Agreement with Sanofi (as defined in Note 14) 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 in 2019. The impairment reduced the remaining book value to zero. There was no impairment of indefinite-lived intangible assets in 2018. |
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 2020, the Company reassessed the valuation allowance and considered negative evidence, including the cumulative losses over the three years ended December 31, 2020, and positive evidence, including the income during the year ended December 31, 2020 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, 2020 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 $309.0 million at December 31, 2020. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Expected Volatility Risk-free Interest Rate Expected Term Dividend December 31, 2020: Employees 98% 1.3% 4 0 % Officers and non-employee directors 85% 1.4% 7 0 % 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 % |
Cash and Cash Equivalents and_2
Cash and Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents and Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments | As of December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) Cash and cash equivalents $ 126,263 $ — $ — $ 126,263 Securities maturing within one year: Corporate debt securities 26,018 5 (11) 26,012 Total short-term investments $ 26,018 $ 5 $ (11) $ 26,012 Total cash and cash equivalents and investments $ 152,281 $ 5 $ (11) $ 152,275 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 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value, by Balance Sheet Grouping | Assets and Liabilities at Fair Value As of December 31, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets Cash and cash equivalents $ 126,263 $ — $ — $ 126,263 Short-term investments — 26,012 — 26,012 Total cash and cash equivalents and investments $ 126,263 $ 26,012 $ — $ 152,275 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 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment [Abstract] | |
Property, Plant and Equipment | Estimated Useful Lives As of December 31, In Years 2020 2019 (in thousands) Computers and software 3-5 $ 3,826 $ 4,587 Furniture and fixtures 5-7 1,867 5,629 Laboratory equipment 3-7 — 3,279 Leasehold improvements 3-7 417 417 Buildings 15-40 — 59,212 Land — — 2,664 Total property and equipment 6,110 75,788 Less: Accumulated depreciation and amortization (5,815) (61,741) Net property and equipment $ 295 $ 14,047 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, 2020 2019 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 201,610 $ 193,270 Research and development tax credits 29,304 46,306 Orphan drug credits 24,524 24,524 Capitalized research and development 47,075 58,596 Stock-based compensation 5,651 5,340 Other 844 5,533 Total deferred tax assets 309,008 333,569 Deferred tax liabilities: Deferred tax liability related to acquisition of Symphony Icon — (4,140) Other — (3) Total deferred tax liabilities — (4,143) Less: valuation allowance (309,008) (329,426) Net deferred tax liabilities $ — $ — |
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, 2020, 2019 and 2018 consists of the following: Year Ended December 31, 2020 2019 2018 (in thousands) Expected income tax expense (benefit) at 21% $ (12,300) $ 26,065 $ (25,315) State income taxes, net of federal benefit (269) 445 (809) Equity compensation 1,777 1,688 1,059 Research and development credit — — (978) Write off of credit carryover due to 382 study 31,053 — — Change in valuation allowance (20,418) (35,276) 25,928 Other (1) 157 1,064 115 Income tax benefit $ — $ (6,014) $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | (in thousands) 2021 $ 632 2022 645 2023 — 2024 — 2025 — Thereafter — Total undiscounted operating lease liability 1,277 Less: amount of lease payments representing interest (113) Present value of future lease payments 1,164 Less: short-term operating lease liability (553) Long-term operating lease liability $ 611 |
Equity Incentive Awards (Tables
Equity Incentive Awards (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Incentive Awards [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | 2020 2019 2018 (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 7,695 $ 8.95 6,152 $ 10.68 4,961 $ 11.17 Granted 3,495 3.24 2,435 5.06 1,916 10.00 Exercised — — — — (97) 7.55 Expired (236) 12.91 (212) 9.95 (239) 14.21 Forfeited (2,557) 6.78 (680) 10.42 (389) 12.04 Outstanding at end of year 8,397 7.12 7,695 8.95 6,152 10.68 Exercisable at end of year 4,684 $ 9.48 4,275 $ 10.56 3,620 $ 10.72 |
Schedule of Nonvested Restricted Stock Units Activity | Shares Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2019 2,830 $ 6.35 Granted 3,144 3.27 Vested (1,219) 6.56 Forfeited (1,986) 4.13 Outstanding at December 31, 2020 2,769 $ 4.35 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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) 2020 2019 2018 Numerator: Net income (loss) $ (58,574) $ 130,133 $ (120,548) Add interest expense on Convertible Notes — 5,067 — Adjusted net income (loss) $ (58,574) $ 135,200 $ (120,548) Denominator: Shares used in computing net income (loss) per common share, basic 110,841 106,218 105,830 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 110,841 116,747 105,830 Net income (loss) per share - basic $ (0.53) $ 1.23 $ (1.14) Net income (loss) per share - diluted $ (0.53) $ 1.16 $ (1.14) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Inventory (Details) | Dec. 31, 2019USD ($) |
Accounting Policies [Abstract] | |
Inventory, Work in Process, Gross | $ 200,000 |
Inventory, Finished Goods, Gross | 900,000 |
Inventory, Raw Materials, Gross | $ 3,200,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Concentration of Credit Risk (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Disclosure on Geographic Areas, Revenue from External Customers Attributed to Entity's Country of Domicile, Percent | 98.00% | 10.00% | 40.00% |
Disclosure On Geographic Areas Revenue From External Customers Attributed to Germany | 89.00% | 53.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Segment Information and Signficant Customers (Details) - segment | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Number of operating segments | 1 | ||
Entity Wide Revenue Sanofi Percentage | 89.00% | 53.00% | |
LXRX Diplomat customer concentration | 22.00% | 14.00% | |
Biologics customer concentration | 65.00% | 25.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Intangible asset (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 19,716,000 | $ 0 |
Finite-lived Intangible Assets, Fair Value Disclosure | $ 18,500,000 | |
Goodwill and Intangible Asset Impairment | $ 28,638,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of assets | 10 years | ||
Accrued research and development services current | $ 21,962 | $ 29,033 | |
Accrued compensation and benefits current | 6,200 | 9,644 | |
Operating Lease, Liability, Current | 553 | 553 | |
Other Accrued Liabilities, Current | 976 | 2,921 | |
Accrued Liabilities | $ 29,691 | $ 42,151 | |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | |
Asset Impairment Charges | $ 0 | 28,638 | 0 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 1,600 | $ 0 | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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, 2020 | |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 | 1.30% | 2.20% | 2.60% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected VolatilityRate, Employees | 98.00% | 88.00% | 58.00% |
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 | 1.40% | 2.60% | 2.80% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Officers and Non-employee Directors | 85.00% | 77.00% | 63.00% |
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 | 7 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, 2020USD ($) | |
Accounting Policies [Abstract] | |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 15.7 |
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) $ in Thousands | Dec. 31, 2020USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right-of-use assets | $ 1,200 |
Cash and Cash Equivalents and_3
Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash and Cash Equivalents | ||
Realized Investment Gains (Losses) | $ 0 | |
Available-for-sale Securities, Amortized Cost Basis | 26,018 | |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 5 | |
Available-for-sale Securities, Gross Unrealized Losses | (11) | |
Available-for-sale Securities, Current | 26,012 | |
Cash | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 126,263 | $ 36,112 |
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 | 126,263 | 36,112 |
US Treasury Securities | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 235,463 | |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 94 | |
Available-for-sale Securities, Gross Unrealized Losses | (10) | |
Available-for-sale Securities, Current | 235,547 | |
Short-term Investments | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 26,018 | 235,463 |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 5 | 94 |
Available-for-sale Securities, Gross Unrealized Losses | (11) | (10) |
Available-for-sale Securities, Current | 26,012 | 235,547 |
Cash and Cash Equivalents and Investments | ||
Cash and Cash Equivalents | ||
Available-for-sale Securities, Amortized Cost Basis | 152,281 | 271,575 |
Available-for-sale Securities, Gross Unrealized Gain Accumulated in Investments | 5 | 94 |
Available-for-sale Securities, Gross Unrealized Losses | (11) | (10) |
Available-for-sale Securities, Current | $ 152,275 | $ 271,659 |
Fair Value Measurements (Detail
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 126,263 | $ 36,112 |
Available-for-sale Securities, Fair Value Disclosure | 26,012 | 235,547 |
Investments, Fair Value Disclosure | 152,275 | 271,659 |
Fair Value, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and Cash Equivalents, Fair Value Disclosure | 126,263 | 36,112 |
Available-for-sale Securities, Fair Value Disclosure | 0 | 235,547 |
Investments, Fair Value Disclosure | 126,263 | 271,659 |
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 | 26,012 | 0 |
Investments, Fair Value Disclosure | 26,012 | 0 |
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 ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Lives | 10 years | |||
Property, Plant and Equipment, Gross | $ 6,110,000 | $ 75,788,000 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (5,815,000) | (61,741,000) | ||
Net property and equipment | 295,000 | 14,047,000 | ||
Proceeds from Sale of Buildings | 11,900,000 | 0 | $ 0 | |
Land | 2,700,000 | |||
Inventory, Buildings and Improvements | $ 7,900,000 | |||
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 | $ 3,826,000 | 4,587,000 | ||
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 | $ 1,867,000 | 5,629,000 | ||
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 | $ 0 | 3,279,000 | ||
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 | $ 417,000 | 417,000 | ||
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 | $ 0 | 59,212,000 | ||
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 | $ 0 | $ 2,664,000 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Tax Assets and Liabilities | |||
Deferred Tax Assets, Operating Loss Carryforwards | $ 201,610 | $ 193,270 | |
Deferred Tax Assets, Tax Credit Carryforwards, Research | 29,304 | 46,306 | |
Deferred Tax Assets, Tax Credit Carryforwards, Orphan Drug | 24,524 | 24,524 | |
Deferred Tax Assets, In Process Research and Development | 47,075 | 58,596 | |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost | 5,651 | 5,340 | |
Deferred Tax Assets, Other | 844 | 5,533 | |
Deferred Tax Assets, Gross | 309,008 | 333,569 | |
Deferred Tax Liability Related to Acquisition of Symphony Icon | 0 | (4,140) | |
Deferred Tax Liabilities, Other | 0 | (3) | |
Deferred Tax Liabilities, Gross | 0 | (4,143) | |
Deferred Tax Assets, Valuation Allowance | (309,008) | (329,426) | |
Deferred Tax Liabilities, Net | 0 | 0 | |
Income Tax Benefit | 0 | $ (6,014) | $ 0 |
2020 Federal NOL increase | 38,400 | ||
Decrease in NOLs | (66,900) | ||
R&D Tax Credit Decrease | $ 17,000 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income Tax Benefit | $ 0 | $ (6,014) | $ 0 |
Valuation Allowance, Deferred Tax Asset, Change in Amount | 20,400 | ||
Operating Loss Carryforwards, Federal | 918,100 | ||
Operating Loss Carryforwards, State | 86,900 | ||
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 | 0 | 4,140 | |
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 29,304 | $ 46,306 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current State and Local Tax Expense (Benefit) | $ (269) | $ 445 | $ (809) |
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-based Payment Arrangement, Amount | 1,777 | 1,688 | 1,059 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Research and Development, Amount | 0 | 0 | (978) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | (20,418) | (35,276) | 25,928 |
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | (12,300) | 26,065 | (25,315) |
Write-off of tax credits | 31,053 | ||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 157 | 1,064 | 115 |
Income Tax Benefit | $ 0 | $ (6,014) | $ 0 |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 21.00% |
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, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Aug. 30, 2018USD ($) | Dec. 18, 2017USD ($) | |
Debt Instrument | ||||||||
Proceeds from Convertible Debt | $ 87,500,000 | $ 75,800,000 | ||||||
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 | $ 100,000 | |||||||
Debt Instrument, Fair Value Disclosure | 9,200,000 | |||||||
Recognition of gain or loss on extinguishment | $ 0 | $ 1,003,000 | $ 0 | $ 0 | ||||
Estimated useful life of assets | 10 years | |||||||
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 | |||||||
Debt Instrument, Face Amount | $ 150,000,000 | |||||||
Debt Issuance Costs, Gross | $ 4,100,000 | |||||||
Convertible Debt | 11,600,000 | |||||||
Convertible Debt Exchange - Total cash consideration | $ 50,000,000 | |||||||
2020 Convertible debt exchange - share payment total | shares | 10,368,956 | |||||||
2020 convertible debt exchange - percentage of principal | 85.00% | |||||||
2020 convertible debt exchange - accrued interest | $ 1,300,000 | |||||||
Principal amount of convertible notes | 1,000 | |||||||
Convertible debt exchange | $ 9,600,000 | |||||||
Mortgage Debt Interest Rate_Base_Revere_LXRX | 5.50% | |||||||
Mortgage Debt Interest Rate BasePlus_Revere_LXRX | 7.50% | |||||||
Mortgage Debt Instrument_Revere_LXRX | $ 12,900,000 | |||||||
Mortgage Debt Balloon Payment_LXRX | $ 10,300,000 |
Debt Obligations (Details 1)
Debt Obligations (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Obligations [Abstract] | ||
Long-term Debt, Current Maturities | $ (11,646) | $ (11,012) |
Long-term Debt, Excluding Current Maturities | $ 0 | $ 234,171 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Lexicon borrowing rate | 900.00% |
lxrx_Sanofi termination cash payment | $ 26,000 |
Accounts Receivable | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
lxrx_Sanofi termination cash payment | $ 23,200 |
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, 2020USD ($) | |
Commitments and Contingencies [Abstract] | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 632 |
Operating Leases, Future Minimum Payments, Due in Two Years | 645 |
Operating Leases, Future Minimum Payments, Due in Three Years | 0 |
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 | 1,277 |
Interest on Lease Payments | (113) |
Present Value of Future Lease Payments | 1,164 |
Short-term Lease Commitment, Amount | (553) |
Long-term Debt and Lease Obligation | 611 |
Right-of-use assets | $ 1,200 |
Equity Incentive Awards - Narra
Equity Incentive Awards - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Mar. 31, 2020 | |
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 | 30,000,000 | 30,000,000 |
Options Outstanding, Equity Incentive Plan | 8,026,989 | |
Restricted Stock Units Outstanding, Equity Incentive Plan | 2,683,875 | |
Stock Options Exercised, Equity Incentive Plan | 1,909,515 | |
Shares Issued Pursuant to Restricted Stock Units, Equity Incentive Plan | 3,160,935 | |
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 | 369,917 | |
Stock Options Exercised, Non-Employee Directors Equity Incentive Plan | 0 | |
Shares Issued Pursuant to Restricted Stock Awards, Non-Employee Directors Equity Incentive Plan | 130,936 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 11,165,885 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 14,118,789 | |
Restricted Stock Units Outstanding, Non-Employee Directors Equity Incentive Plan | 85,104 | |
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 |
Equity Incentive Awards (Detail
Equity Incentive Awards (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | 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, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 2.35 | $ 3.18 | $ 5.63 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value | $ 0.2 | |||
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 2 months 12 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0.5 | |||
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 | 8,397 | 7,695 | 6,152 | 4,961 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 7.12 | $ 8.95 | $ 10.68 | $ 11.17 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 3,495 | 2,435 | 1,916 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 3.24 | $ 5.06 | $ 10 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | (97) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0 | $ 0 | $ 7.55 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (236) | (212) | (239) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ 12.91 | $ 9.95 | $ 14.21 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (2,557) | (680) | (389) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 6.78 | $ 10.42 | $ 12.04 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 4,684 | 4,275 | 3,620 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 9.48 | $ 10.56 | $ 10.72 |
Equity Incentive Awards (Deta_2
Equity Incentive Awards (Details 3) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 | 85,104 | 27,728 | 20,512 |
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 | $ 1.86 | $ 5.67 | $ 7.80 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 3,200 | $ 2,900 | $ 3,300 |
Equity Incentive Awards (Deta_3
Equity Incentive Awards (Details 4) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
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 | 2,769 | 2,830 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 4.35 | $ 6.35 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 3,144 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 3.27 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (1,219) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 6.56 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (1,986) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period, Weighted Average Fair Value | $ 4.13 |
Benefit Plan (Details)
Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Benefit Plan [Abstract] | |||
Defined Contribution Plan, Cost | $ 0.9 | $ 1.2 | $ 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 ($) | Feb. 28, 2019USD ($) | Oct. 31, 2018USD ($) | Nov. 30, 2017USD ($) | Oct. 31, 2017USD ($) | Aug. 31, 2016USD ($) | Nov. 30, 2015USD ($)milestone | Oct. 31, 2014USD ($) | Oct. 31, 2014EUR (€) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
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 | |||||||||||
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 | $ 2,300 | $ 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 | 300 | 4,900 | $ 4,600 | ||||||||||
Ipsen product sales | 1,300 | $ 1,600 | |||||||||||
Ipsen Maximum Sales Milestones | € | € 72 | ||||||||||||
Settlement Payment from Termination | 208,000 | ||||||||||||
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 | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Net Income (Loss) Attributable to Parent | $ (58,574) | $ 130,133 | $ (120,548) |
Debt Instrument, Convertible, If-converted Value in Excess of Principal | $ 0 | $ 5,067 | $ 0 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0 | 164,000 | 0 |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | 0 | 10,365,000 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 110,841,000 | 116,747,000 | 105,830,000 |
Earnings Per Share, Basic | $ (0.53) | $ 1.23 | $ (1.14) |
Earnings Per Share, Diluted | $ (0.53) | $ 1.16 | $ (1.14) |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,113,054 | 8,206,390 | 7,438,134 |
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities | $ (58,574) | $ 135,200 | $ (120,548) |
Weighted Average Number of Shares Issued, Basic | 110,841,000 | 106,218,000 | 105,830,000 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Financial Statements, Captions | |||
Revenues | $ 23,995 | $ 322,073 | $ 63,209 |
Income (Loss) From Operations | (47,800) | 141,445 | (103,279) |
Net loss | $ (58,574) | $ 130,133 | $ (120,548) |
Weighted Average Number of Shares Issued, Basic | 110,841 | 106,218 | 105,830 |
Weighted Average Number of Shares Outstanding, Diluted | 110,841 | 116,747 | 105,830 |
Earnings Per Share, Diluted | $ (0.53) | $ 1.16 | $ (1.14) |
Earnings Per Share, Basic | $ (0.53) | $ 1.23 | $ (1.14) |
Asset Sale (Details)
Asset Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |||
Proceeds from Sale of Productive Assets | $ 160,385 | $ 0 | $ 0 |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | (12,200) | (15,400) | (33,700) |
Severance Costs | 5,500 | ||
Debt Instrument | |||
Severance Costs | 5,500 | ||
Gain on sale of non-financial assets | 132,585 | $ 0 | $ 0 |
TerSera Maximum Development, Regulatory and Commercial Milestones | 65,000 | ||
Final Consideration including amounts released to settle | 160,000 | ||
541713 Research and Development in Nanotechnology | |||
Asset Retirement Obligation Disclosure [Abstract] | |||
Severance Costs | 2,500 | ||
Debt Instrument | |||
Severance Costs | 2,500 | ||
General and Administrative Expense | |||
Asset Retirement Obligation Disclosure [Abstract] | |||
Severance Costs | 3,000 | ||
Debt Instrument | |||
Severance Costs | $ 3,000 |
Other Capital Agreements (Detai
Other Capital Agreements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Sale of Stock, Number of Shares Issued in Transaction | 20,312,500 | |
Shares Issued, Price Per Share | $ 3.200 | |
Proceeds from December 2020 common stock offering | $ 63,000,000 | |
Commissions from December 2020 Common Stock Offering | 1,800,000 | |
Offering expenses from December 20 common stock offering | 200,000 | |
ATM Offering Total | $ 50,000,000 | |
Shares sold in Nov 2020 ATM Offering | 3,709,233 | |
Share price in November 20 ATM Offering | $ 1.992 | |
Proceeds from Nov 2020 ATM Offering | 7,000,000 | |
Subsequent Event [Line Items] | ||
ATM Offering Total | $ 50,000,000 | |
Subsequent Event | ||
Equity [Abstract] | ||
Shares sold in January 2021 ATM offering | 2,000,000 | |
Share price in January 2021 ATM Offering | 8.463 | |
Proceeds from January 2021 ATM Offering | $ 16,400,000 | |
Subsequent Event [Line Items] | ||
Share price in January 2021 ATM Offering | 8.463 | |
Shares sold in January 2021 ATM offering | 2,000,000 | |
Proceeds from January 2021 ATM Offering | $ 16,400,000 |