Lexicon shares drop after Sanofi says it is terminating alliance to develop add-on diabetes treatment Zynquista

Sanofi announced that it is ending its partnership with Lexicon Pharmaceuticals for the once-daily, dual SGLT1 and SGLT2 inhibitor Zynquista (sotagliflozin) in all ongoing type 1 and type 2 diabetes programmes. The news follows the release of topline data from the Phase III InSynchrony clinical programme in adults with type 2 diabetes, with Sanofi citing the primary endpoint results for HbA1c reduction in the SOTA-CKD3 and SOTA-CKD4 studies as the reason for its decision. Shares in Lexicon fell as much as 48 percent on the news. 

"At this time, the ongoing Phase III clinical trials will continue and there will be no immediate changes," Sanofi said, adding it has a "willingness to work with Lexicon to ensure a smooth transition of the studies." The French drugmaker, which acquired a global licence for Zynquista in 2015 under a deal worth up to $1.7 billion, indicated that next steps are being discussed with Lexicon. 

However, Lexicon stated that it considers Sanofi's notice of termination to be invalid and that it believes the French drugmaker is in breach of contract. "In the event of a valid termination of the Sanofi alliance, we will...look forward to regaining full rights to Zynquista in type 1 diabetes in the US, as well as rights in the remainder of the world, notably including the EU, in which Zynquista has already received approval," stated Lexicon CEO Lonnel Coats. He added "we are confident in the strength of the data we have seen thus far in the type 2 diabetes programme and are optimistic about achieving continued success in the balance of the core Phase III programme, which we expect will be completed in the coming months." 

According to Sanofi, the SOTA-CKD3 study demonstrated that compared to placebo, the 400-mg dose of Zynquista significantly lowered HbA1c levels in the entire population of patients with stage 3 chronic kidney disease (CKD), as well as those with stage 3A CKD at 26 weeks, but significance was not achieved for the subset of patients with stage 3B CKD. In the SOTA-CKD4 trial, Sanofi said neither the 200-mg, nor the 400-mg dose of Zynquista led to a significant reduction in HbA1c in patients with CKD4, versus placebo, at 26 weeks. The company also reported topline results from the SOTA-MET study, which showed that at 26 weeks, the 400-mg dose of Zynquista significantly cut HbA1c levels compared to placebo in patients on metformin. 

Pablo Lapuerta, chief medical officer at Lexicon, remarked that "although the SOTA-CKD4 study appears to have narrowly missed statistical significance on HbA1c, we are very encouraged by the overall results in that study." Lexicon noted that Zynquista was well tolerated in all three studies, and that the data will be presented at upcoming medical conferences. 

The FDA rejected Zynquista in March for use as an add-on treatment to insulin for adults with type 1 diabetes. The companies did not specify a reason at the time, although an FDA advisory panel was split on whether to recommend approval of the drug, while FDA staff had raised concerns about SGLT2 inhibitors being linked to higher risks of diabetic ketoacidosis.

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