Penny Stock Lexicon Pharmaceuticals Surges On Obesity Pact Worth $1 Billion With Novo Nordisk

Lexicon Pharmaceuticals Inc. LXRX stock is trading higher on Friday.

Penny stock Lexicon Pharmaceuticals entered into an exclusive license agreement with Novo Nordisk A/S NVO on Friday for LX9851, a first-in-class, oral non-incretin development candidate in obesity and associated metabolic disorders.

Under the terms of the agreement, Novo Nordisk obtains an exclusive, worldwide license to develop, manufacture, and commercialize LX9851 in all indications.

Also Read: Lexicon Pharmaceuticals (LXRX) Stock Is Down: What’s Going On?

Lexicon will be responsible for completing the agreed-upon Investigational New Drug (IND) application-enabling activities for LX9851.

Novo Nordisk will file the IND and all further development, manufacturing, and commercialization of LX9851.

Lexicon is eligible to receive upfront and near-term milestone payments of up to $75 million. In total, Lexicon will be eligible to receive $1 billion in upfront and potential development, regulatory and sales milestone payments. Lexicon is also entitled to tiered royalties on net sales of LX9851.

LX9851, discovered and developed by Lexicon, is a potent and selective oral small molecule inhibitor of Acyl-CoA Synthetase 5 (ACSL5).

ACSL5 plays a key role in the metabolic pathway, which regulates fat accumulation and energy balance.

Additionally, LX9851 may activate the ileal brake mechanism leading to increased satiety by delaying gastric emptying and suppressing appetite. Preclinical in vivo efficacy data presented at Obesity Week 2024 show that LX9851, when combined with Novo Nordisk’s semaglutide, significantly reduced weight, food intake and fat mass compared to semaglutide alone.

Separately, LX9851 mitigated weight regain and had positive effects on liver steatosis when introduced after semaglutide discontinuation.

Price Action: LXRX stock is up 97.4% at $0.69 during the premarket session at the last check Friday.

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