Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX) has signed a privately-negotiated, separate exchange agreement with specific holders of the 5.25% Convertible Senior Notes that will be due to 2021.
Lexicon reduces its outstanding debt by 90% since June
Under the terms of the agreement, the holders will exchange Notes of an aggregate principal amount of around $62.55 million for aggregate consideration that consists of $41.03 million in cash, which includes $1.07milion in accrued interest and 8.75 million Lexicon common shares at $0.001 per share. The company expects the transactions to close by September 28, 2020, subject to closing conditions. Following the transaction’s closing, around $24.95 million in aggregate principal amount of the Notes will be outstanding.
The closing of the transactions will reduce Lexicon’s remaining interest expense through 2021 on Notes by around $3.9 million. After completion and including other debt reductions and repayment of the secured loan concurrent with finalizing of XERMELO® sale and associate assets to TerSera Therapeutics, the company will have reduced its principal amount of the outstanding debt by around 90% since June 30, 2020. This will align with the company’s strategic focus on the LX9211 neuropathic pain program and other R & D assets.
LX9211 has shown CNS penetration in preclinical studies
LX9211 is an orally delivered, potent, selective small-molecule AAK1 inhibitor, a pain phenotype target that the company discovered and characterized extensively in collaboration with Bristol Myers Squibb. According to preclinical studies, LX9211 has shown central nervous system penetration and pain behavior reduction in neuropathic pain models without impacting opiate pathways. The company holds exclusive R&D and commercialization rights on the product as well as other compounds acting via AAK1 under the collaboration.
However, the announcement does not comprise a selling offer or solicitation of an offer to acquire any company securities. It is important to note that the issuance of common shares is yet to be registered as per the Securities Act of 1933 or other securities laws, and thus the securities cannot be sold or offered.