Lexicon Pharmaceuticals inked a $60-million deal with Symphony Capital Partners to advance three candidates in its pipeline as well as an alliance with The Invus Group that could total $550 million over the next five years.
"We have developed a long-term financial framework upon which we are building an integrated biopharmaceutical company," remarks Arthur T. Sands, M.D., Ph.D., founder, president and CEO of Lexicon. "With Invus and Symphony, Lexicon will have substantially greater resources and flexibility to aid in fulfilling our mission to discover and develop breakthrough treatments for human disease."
According to the agreement, Invus' increased ownership in Lexicon to 40% of the post-transaction outstanding shares of common stock. Invus will invest $205 million in 2007 with the potential for up to an additional $345 million over the next four years. The company received warrants to purchase 16.4 million shares of Lexicon common stock for $3.09 per share. The price represents the 10-day volume weighted average as of June 14, according to Lexicon. Invus also will purchase approximately 20.4 million additional shares of common stock for $4.50, a 46% premium over Friday, June 15, closing price of $3.08.
Under the terms of the Symphony transaction, $45 million has been provided to Symphony Icon, a newly created company that was established to accelerate development of Lexicon's first three product candidates and hold the license to the related intellectual property. LX6171 is being investigated for cognitive disorders and is completing Phase Ib, LX1031 for irritable bowel syndrome is still in Phase Ib, and LX1032 for gastrointestinal disorders is in preclinical development. An additional $15 million of equity capital was provided directly to Lexicon for general corporate purposes.