What changed in this filing

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Item 9A. Controls and Procedures

2025-03-07 compared with 2024-03-25 · 202 added, 129 removed, 644 unchanged (34% of the section changed)

15 unchanged sentences

During the three months ended December 31, 2024, none of our directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Management Severance Plan

On March 4, 2025, we adopted a Management Severance Plan, which will provide severance payments and benefits to eligible employees in connection with certain terminations of employment.

The plan was approved by our compensation committee and has an effective date of March 4, 2025.

Under the plan, in the event that a participating executive officer’s employment is terminated by us without cause (as defined in the plan) or resigns for good reason (as defined in the plan), if the participating executive officer signs a release of all claims, then the participating executive officer would be entitled to lump sum payments equal to (a) 12 months of current base salary, (b) pro-rated amount of current target cash bonus (only if such termination occurs between September 1 and December 31) and (c) an amount approximating 12 months of COBRA premiums for continued coverage under our group health plans, less the employee contribution amount that our similarly situated employees pay for such coverage (only if the participating executive officer is enrolled in our group health plans and elects to continue such coverage).

In the event that the separation described in the preceding paragraph occurs within the 24-month period following a change in control, if the participating executive officer signs a release of all claims, then the participating executive officer would be entitled to lump sum payments equal to (a) 12 months of current base salary (or 18 months of current base salary in the case of our chief executive officer), (b) current target cash bonus and (c) an amount approximating 12 months of COBRA premiums for continued coverage under our group health plans (or 18 months in the case of our chief executive officer), less the employee contribution amount that our similarly situated employees pay for such coverage (only if the participating executive officer is enrolled in our group health plans and elects to continue such coverage).

For purposes of the plan, a change in control shall have occurred upon any of the following events:

(a) any person (other than Invus, L.P.

and its affiliates) becomes the beneficial owner of securities representing 35% or more of the combined voting power of our securities, (b) the consummation of a reorganization, merger or consolidation pursuant to which our stockholders immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own or control more than 50% of the combined voting power of the surviving entity’s outstanding voting securities in substantially the same proportions as prior to such reorganization, merger or consolidation, (c) our liquidation or dissolution or the sale of all or substantially all of our assets, (d) following the election or removal of directors, a majority of our board of directors consists of individuals who were not members of our board of directors two years before such election or removal or (e) any other corporate event deemed to be a change in control by the plan administrator.

The terms of the plan will supersede all potential severance payments and benefits contained within participating executive officers’ individual offer letters and employment agreements.

The foregoing description of the plan does not purport to be complete and is qualified in its entirety by reference to the plan, a copy of which is attached as an exhibit to this annual report on Form 10-K and the terms of which are incorporated herein by reference.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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1.1 — Open Market Sale Agreement℠ , dated December 29, 2023, with Jefferies LLC (filed as Exhibit 1.1 to the Company's Current Report on Form 8-K dated December 29, 2023 and incorporated by reference herein).

3.1 — Fifth Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8‑K dated May 20, 2022 and incorporated by reference herein).

3.2 — Certificate of Designations , dated March 12, 2024 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8‑K dated March 12, 2024 and incorporated by reference herein).

3.1 — Sixth Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 10, 2024 and incorporated by reference herein).

3.2 — Second Amended and Restated Bylaws (filed as Exhibit 3.2 to the Company’s Current Report on Form 8‑K dated April 26, 2012 and incorporated by reference herein).

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4.8 — Description of Common Stock (filed as Exhibit 4.8 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2021 and incorporated by reference herein).

10.1 — Offer Letter , dated July 1, 2014, with Lonnel Coats, as amended (filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2018 and incorporated by reference herein).

10.2 — Employment Agreement , dated January 1, 1999, with Jeffrey L.

Wade (filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-1 (Registration No.

333-96469) and incorporated by reference herein).

*†10.1 — Management Severance Plan , dated March 4, 2025

10.2 — Offer Letter , dated July 3, 2024, with Michael S.

(filed as Exhibit 10.1 to the Company’s Current Report on Form 8‑K dated July 3, 2024 and incorporated by reference herein).

10.3 — Offer Letter , dated July 27, 2021, with Craig B.

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(filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2001 and incorporated by reference herein).

10.5 — Separation Agreement, dated September 13, 2024, with Jeffrey L.

Wade (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 13, 2024 and incorporated by reference herein).

10.6 — Consulting Agreement, dated September 13, 2024, with Jeffrey L.

Wade (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 13, 2024 and incorporated by reference herein).

10.7 — Form of Indemnification Agreement with Officers and Directors (filed as Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (Registration No.

333-96469) and incorporated by reference herein).

*10.6 — Summary of Non-Employee Director Compensation

10.8 — Summary of Non-Employee Director Compensation (filed as Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2023 and incorporated by reference herein).

10.9 — 2017 Equity Incentive Plan, as amended (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 27, 2023 and incorporated by reference herein).

10.10 — 2017 Non-Employee Directors’ Equity Incentive Plan, as amended (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated April 27, 2023 and incorporated by reference herein).

10.9 — Form of Stock Option Agreement with Officers under the 2017 Equity Incentive Plan (filed as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2017 and incorporated by reference herein).

*10.11 — Form of Stock Option Agreement with Officers under the 2017 Equity Incentive Plan

*10.12 — Form of Restricted Stock Unit Agreement with Officers under the 2017 Equity Incentive Plan

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10.14 — Form of Notice of Restricted Stock Unit Grant to Directors under the 2017 Non-Employee Directors’ Equity Incentive Plan (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 and incorporated by reference herein).

*†10.15 — Exclusive License Agreement , dated October 16, 2024, with Viatris Inc.

10.16 — Collaboration and License Agreement , dated December 17, 2003, with Bristol-Myers Squibb Company (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2015 and incorporated by reference herein).

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10.19 — Sublease Agreement , dated February 8, 2021, with Repsol Oil & Gas USA, LLC (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 8, 2021 and incorporated by reference herein).

10.20 — Office Lease dated July 30, 2024, with RFL NO.4 Limited Partnership (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2024 and incorporated by reference herein).

†10.21 — Loan and Security Agreement , dated March 17, 2022, with Oxford Finance, LLC and the lenders listed therein (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2022 and incorporated by reference herein).

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†10.25 — Fourth Amendment to Loan and Security Agreement , dated December 29, 2023, with Oxford Finance, LLC and the lenders listed therein (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 29, 2023 and incorporated by reference herein).

†10.22 — F ifth Amendment to Loan and Security Agreement , dated March 6, 2024, with Oxford Finance, LLC and the lenders listed therein (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated March 6, 2024 and incorporated by reference herein).

10.23 — Purchase Agreement , dated May 31, 2023, with Artal International S.C.A., Artal Group S.A., Artal International Management S.A., Invus Advisors, L.L.C., Invus Public Equities, L.P., Invus, L.P., Mr.

Amaury Wittouck, Stichting Administratiekantoor Westend and Westend S.A.

(filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 31, 2023 and incorporated by reference herein).

†10.26 — Fifth Amendment to Loan and Security Agreement , dated March 6, 2024, with Oxford Finance, LLC and the lenders listed therein (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated March 6, 2024 and incorporated by reference herein).

†10.27 — Sixth Amendment to Loan and Security Agreement , dated June 28, 2024 with with Oxford Finance, LLC and the lenders listed therein (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 28, 2024 and incorporated by reference herein)

10.28 — Preferred Stock Purchase Agreement , dated March 11, 2024, with the purchasers party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 6, 2024 and incorporated by reference herein).

*19.1 — Insider Trading and Confidentiality Policy

21.1 — Subsidiaries (filed as Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2021 and incorporated by reference herein).

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*32.1 — Certification of Principal Executive and Principal Financial Officers Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .

*97.1 — Incentive-Based Compensation Clawback Policy

97.1 — Incentive-Based Compensation Clawback Policy (filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2023 and incorporated by reference herein).

*101.INS — XBRL Instance Document.

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* Filed herewith.

† Confidential treatment has been requested for portions of this exhibit (indicated by “[**]”).

The confidential portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission.

† Certain information (indicated by “[**]”) has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the Company if publicly disclosed.

Form 10-K Summary

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March 7, 2025 By:

/s/ LONNEL COATS

/s/ MICHAEL S.

Chief Executive Officer

March 7, 2025 By:

/s/ JEFFREY L.

President and Chief Financial Officer

Senior Vice President and Chief Financial Officer

Power of Attorney

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Lonnel Coats and Jeffrey L.

Wade, or either of them, each with the power of substitution, his or her attorney-in-fact, to sign any amendments to this Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, here ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael S.

Coiante, or either of them, each with the power of substitution, his or her attorney-in-fact, to sign any amendments to this Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, here ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ LONNEL COATS Chief Executive Officer and Director

/s/ MICHAEL S.

EXTON Chief Executive Officer and Director

(Principal Executive Officer) March 7, 2025

/s/ JEFFREY L.

WADE President and Chief Financial Officer (Principal Financial Officer) March 25, 2024

COIANTE Senior Vice President and Chief Financial Officer (Principal Financial Officer) March 7, 2025

/s/ KRISTEN L.

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Barker, Ph.D.

/s/ ROBERT J.

LEFKOWITZ Director March 25, 2024

Lefkowitz, M.D.

CHEUNG Director March 7, 2025

/s/ CHRISTOPHER J.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Lexicon Pharmaceuticals, Inc.

To the Stockholders and the Board of Directors of Lexicon Pharmaceuticals, Inc.

Opinion on the Financial Statements

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Accrued research and development expenses

Description of the Matter

As described in Note 2 and Note 5 to the consolidated financial statements, the Company records accruals for estimated costs of research and development activities that include contract services for clinical trials.

Description of the Matter As described in Note 2 and Note 5 to the consolidated financial statements, the Company records accruals for estimated costs of research and development activities that include contract services for clinical trials.

Clinical trial expenses are accrued based upon milestones and the number of patients enrolled over the duration of the study.

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Auditing management’s accounting for accrued third-party clinical trial research and development expenses is especially challenging because of the judgment applied by management to determine the estimate of services completed related to the activities under the Company’s research and development agreements.

How We Addressed the Matter in Our Audit

Our audit procedures included, among others, testing the accuracy and completeness of the underlying inputs used in management’s analysis to determine costs incurred.

We compared expenses incurred to budgeted amounts per executed vendor contracts and to expenses incurred in prior periods and obtained an understanding of the reasons for changes.

How We Addressed the Matter in Our Audit Our audit procedures included, among others, testing the accuracy and completeness of the underlying inputs used in management’s analysis to determine costs incurred.

We compared recorded expenses to budgeted amounts per executed vendor contracts, actual amounts incurred at the end of each study milestone, and to expenses incurred in prior periods and obtained an understanding of the reasons for significant changes.

We inspected the terms and conditions of vendor contracts, change orders and trial budgets, and clerically tested the cost models to track progress against trial budgets.

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Long-term debt, net 100,298 99,508

Long-term operating lease liabilities 5,265 5,424

Other long-term liabilities 6,924 5,265

Total liabilities 152,470 136,319

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5,000,000 shares authorized

no shares issued and outstanding

Series A Convertible preferred stock;

2,304,147 shares issued and none outstanding at December 31, 2024;

no shares issued or outstanding at December 31, 2023

Common stock, $ 0.001 par value;

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Accumulated deficit ( 1,967,242 ) ( 1,766,839 )

Accumulated other comprehensive income (loss) 31 ( 428 )

Accumulated other comprehensive income 119 31

Treasury stock, at cost, 1,528,008 and 867,973 shares, respectively

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Net product revenue $ 6,001 $ 1,110 $ —

Licensing revenue 25,000 — —

Royalties and other revenue 80 94 139

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Net loss per common share, basic and diluted $ ( 0.63 ) $ ( 0.80 ) $ ( 0.62 )

Shares used in computing net loss per common share, basic and diluted 221,130 165,733 145,652

Weighted average common shares outstanding, basic and diluted 320,031 221,130 165,733

Other comprehensive loss:

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Additional Other

Common Stock Paid-In Accumulated Comprehensive Treasury

Shares Par Value Capital Deficit Gain (Loss) Stock Total

Balance at December 31, 2020 142,289 $ 142 $ 1,561,096 $ ( 1,400,018 ) $ ( 6 ) $ ( 4,843 ) $ 156,371

Stock-based compensation — — 10,577 — — — 10,577

Issuance of common stock under an Open Market Sale Agreement, net of issuance fees 6,177 6 35,485 — — — 35,491

Issuance of common stock under Equity Incentive Plans 1,616 2 1,591 — — — 1,593

Repurchase of common stock — — — — — ( 2,675 ) ( 2,675 )

Net loss — — — ( 87,758 ) — — ( 87,758 )

Unrealized loss on investments — — — — ( 4 ) — ( 4 )

Common Stock Preferred Stock Paid-In Accumulated Comprehensive Treasury

Shares Par Value Shares Par Value Capital Deficit Income (Loss) Stock Total

Balance at December 31, 2021 150,082 $ 150 — $ — $ 1,608,749 $ ( 1,487,776 ) $ ( 10 ) $ ( 7,518 ) $ 113,595

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Balance at December 31, 2023 245,793 $ 245 — $ — $ 1,862,558 $ ( 1,766,839 ) $ 31 $ ( 2,885 ) $ 93,110

Stock-based compensation — — — — 13,499 — — — 13,499

Issuance of preferred stock, net of fees — — 2,304 23 241,299 — — — 241,322

Issuance of common stock under Equity Incentive Plans 2,020 3 — — 61 — — — 64

Repurchase of common stock — — — — — — — ( 1,730 ) ( 1,730 )

Conversion of preferred stock to common stock 115,207 115 ( 2,304 ) ( 23 ) ( 92 ) — — — —

Net loss — — — — — ( 200,403 ) — — ( 200,403 )

Unrealized gain on investments — — — — — — 88 — 88

Balance at December 31, 2024 363,020 $ 363 — $ — $ 2,117,325 $ ( 1,967,242 ) $ 119 $ ( 4,615 ) $ 145,950

The accompanying notes are an integral part of these consolidated financial statements.

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Loss on disposal of property and equipment — — 3

Accretion of marketable securities purchased at a discount ( 9,305 ) ( 5,617 ) —

Other non-cash adjustments 812 1,512 —

Changes in operating assets and liabilities:

(Increase) decrease in accounts receivable ( 982 ) ( 14 ) 381

Increase in inventories ( 381 ) — —

(Increase) decrease in prepaid expenses and other current assets ( 2,899 ) ( 316 ) 2,885

Increase in accounts receivable ( 2,463 ) ( 982 ) ( 14 )

Decrease (increase) in inventories 150 ( 381 ) —

Decrease (increase) in prepaid expenses and other current assets 598 ( 2,899 ) ( 316 )

Decrease in other long-term assets 1,152 467 656

Increase (decrease) in accounts payable and other liabilities 6,454 76 ( 14,158 )

Increase in accounts payable and other liabilities 14,801 6,454 76

Net cash used in operating activities ( 178,780 ) ( 161,897 ) ( 88,851 )

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Maturities of investments 314,400 173,870 64,197

Net cash (used in) provided by investing activities ( 49,943 ) ( 71,078 ) 2,110

Net cash used in investing activities ( 15,378 ) ( 49,943 ) ( 71,078 )

Cash flows from financing activities:

Proceeds from issuance of common stock, net of fees — 138,823 94,205

Proceeds from issuance of common stock for equity incentive plans 64 — —

Proceeds from issuance of preferred stock, net of fees 241,322 — —

Repurchase of common stock ( 1,730 ) ( 824 ) ( 864 )

Proceeds (repayment) of debt borrowings, net of fees 49,961 48,868 ( 11,700 )

Proceeds from debt borrowings, net of fees — 49,961 48,868

Other debt financing fees ( 1,307 ) — —

Net cash provided by financing activities 238,349 187,960 142,209

Net decrease in cash and cash equivalents ( 23,880 ) ( 17,720 ) ( 62,198 )

Net increase (decrease) in cash and cash equivalents 44,191 ( 23,880 ) ( 17,720 )

Cash and cash equivalents at beginning of year 22,465 46,345 64,065

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Accrual of deferred financing costs $ — $ 250 $ —

Conversion of preferred stock to common stock $ 115 $ — $ —

The accompanying notes are an integral part of these consolidated financial statements.

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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 commercialization efforts for INPEFA for heart failure;

the success of its commercial launch of sotagliflozin for patients with type 1 diabetes and CKD, if approved;

its ongoing research and development efforts and its ability to obtain necessary regulatory approvals of the drug candidates which are the subject of such efforts;

The Company’s future success is dependent upon many factors, including, but not limited to, its ongoing research and development efforts and its ability to obtain necessary regulatory approvals of the drug candidates which are the subject of such efforts;

its success in establishing new collaborations and licenses and its receipt of milestones, royalties and other payments under such arrangements;

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Actual results could differ from those estimates.

Segment Information.

Lexicon operates as 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, as well as from commercial sales of its approved drug products.

For additional segment disclosures, see Note 14.

Cash, Cash Equivalents and Short-Term Investments.

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The Company has not experienced any realized losses on its cash equivalents or short-term investments.

The Company’s accounts receivable are unsecured and are primarily

concentrated in large pharmaceutical and biotechnology companies located in the United States.

The Company’s accounts receivable are unsecured and are primarily concentrated in large pharmaceutical and biotechnology companies located in the United States.

The Company has not experienced any significant credit losses to date.

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.

In support of the commercial launch of INPEFA in 2023, the Company entered into distribution agreements with wholesalers and limited retail pharmacies.

The Company’s net product sales are generated from sales to these customers.

In 2023, 11 United States-based customers accounted for all of the Company’s net product revenue.

Three large wholesalers, each of which account for greater than 10% of total revenues and in the aggregate account for greater than 85 % of total revenues.

In 2022 and 2021, the Company’s revenues were solely derived from royalties and other revenues from one and two customers, respectively.

Property and Equipment.

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There were no impairments of long-lived assets, in 2024, 2023, or 2022.

Lexicon recorded goodwill from previous acquisitions prior to 2011 of $ 44.5 million, representing the excess of purchase price over the fair value of the underlying net identifiable assets including the effects of deferred taxes.

Goodwill is not amortized, but is tested at least annually for impairment at the reporting unit level which the Company has determined is the single operating segment disclosed in its current financial statements.

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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 2024, 2023 or 2022.

Lexicon determines if a contract is or contains a lease at inception or upon modification of the contract.

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Revenue Recognition.

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 collaborative agreements:

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:

(a) identify the contract(s) with a customer;

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Customer Credits.

The Company’s customers were offered various forms of consideration, including allowances, service fees and prompt payment discounts.

The Company’s customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts.

The Company records allowances, deducts the full amount of prompt payment discounts, and deducts service fees from total product sales when revenues are earned and recognized.

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Sales returns.

The Company records allowances for product returns, if appropriate, as a reduction of revenue at the time product sales are recorded based on an assessment of market exclusivity of the product, the patient population, the customers’ return rights and the Company’s historical experience with returns.

Because approval is recent and there is a limited number of patients, most customers and retailers carry a limited inventory.

Collaborative Agreements

Revenues under collaborative agreements include both license revenue and contract research revenue.

Collaboration and Licensing Agreements

Revenues under collaborative agreements may include both license revenue and contract research revenue.

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.

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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.

For 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 (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Any such adjustments are recorded on a cumulative catch-up basis, which would affect such revenues in the period of adjustment.

For agreements in which a license to the Company’s intellectual property is determined to be 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 (a) when the related sales occur, or (b) 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.

Amounts are recorded as accounts receivable when revenue has been recognized and the Company’s right to consideration is unconditional.

Cost of Sales.

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Research and Development Expenses.

Research and development expenses consist of costs incurred for company-sponsored as well as collaborative research and development activities.

Research and development expenses may 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.

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Deferred tax assets are evaluated for realization based on a more-likely-than-not criteria in determining if a valuation allowance should be provided.

In evaluating our valuation allowances, we consider cumulative book losses, the reversal of existing temporary differences, tax planning strategies and estimates of future taxable income, the latter two of which involve the exercise of significant judgment.

In evaluating the valuation allowances, the Company considers cumulative book losses, the reversal of existing temporary differences, tax planning strategies and estimates of future taxable income, the latter two of which involve the exercise of significant judgment.

Net Loss per Common Share.

Net loss per common share is computed using the weighted average number of shares of common stock outstanding.

Shares associated with warrants, 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 Pronouncements Issued But Not Yet Adopted.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures , which is effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures , which is effective prospectively for annual periods beginning after December 15, 2024.

Early adoption is permitted for both standards.

We do not expect these accounting pronouncements to have a material impact on our financial statements.

Early adoption is permitted.

The Company does not expect this accounting pronouncement to have a material impact on the financial statements.

Cash, Cash Equivalents and Investments

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Total short-term investments $ 171,183 $ 136 $ ( 18 ) $ 171,301

Total cash and cash equivalents and investments $ 169,996 $ 42 $ ( 12 ) $ 170,026

Total cash and cash equivalents and short-term investments $ 237,839 $ 136 $ ( 18 ) $ 237,957

As of December 31, 2023

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Total short-term investments $ 147,531 $ 42 $ ( 12 ) $ 147,561

Total cash and cash equivalents and investments $ 138,785 $ — $ ( 428 ) $ 138,357

For the years ended December 31, 2023 and 2022, our investments in an unrealized loss position had an estimated fair value of $ 58.5 million and $ 89.0 million, respectively.

Total cash and cash equivalents and short-term investments $ 169,996 $ 42 $ ( 12 ) $ 170,026

As of December 31, 2024 and 2023, Lexicon’s investments in an unrealized loss position had an estimated fair value of $ 12.9 million and $ 58.5 million, respectively.

There were no realized gains or losses for the years ended December 31, 2024, 2023, and 2022.

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Short-term investments 127,990 43,311 — 171,301

Total cash and cash equivalents and investments $ 164,061 $ 5,965 $ — $ 170,026

Total cash and cash equivalents and short-term investments $ 194,646 $ 43,311 $ — $ 237,957

Assets at Fair Value

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Short-term investments 141,596 5,965 — 147,561

Total cash and cash equivalents and investments $ 120,025 $ 18,332 $ — $ 138,357

Total cash and cash equivalents and short-term investments $ 164,061 $ 5,965 $ — $ 170,026

The carrying amount of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of those instruments.

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Accrued liabilities $ 30,447 $ 17,157

During the years ended December 31, 2024 and 2022 the Company incurred $ 1.1 million and $ 0.3 million, respectively, of severance expense reflected in research and development expenses.

During the years ended December 31, 2024

and 2023 the Company incurred $ 11.2 million and $ 1.4 million, respectively, of severance expense reflected in selling, general, and administrative expenses.

The Company incurred no severance costs in either research and development expenses in 2023 or selling, general, and administrative expenses in 2022.

As of December 31, 2024 and 2023, $ 8.8 million and $ 0.7 million of severance is reflected as accrued compensation and benefits within accrued liabilities on the consolidated balance sheet as noted in the table above.

As of December 31, 2024, $ 3.7 million of the total 2024 severance expense incurred had been paid.

Approximately $ 7.7 million of the remaining December 31, 2024 accrued severance is expected to be paid by March 31, 2025.

Property and Equipment

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Net property and equipment $ 2,484 $ 1,987

During the year ended December 31, 2024, the Company retired $ 1.4 million of computers and software and $ 1.6 million of furniture and fixtures, all of which had been fully depreciated.

Collaboration and Licensing Arrangement

On October 16, 2024, Lexicon entered into an exclusive license agreement (the “License Agreement”) with Viatris Inc.

(“Viatris”) for the development and commercialization of sotagliflozin in all markets outside of the United States and Europe (the “Licensed Territory”).

Under the License Agreement, Lexicon granted Viatris an exclusive, royalty-bearing right and license under its patent rights and know-how to develop and commercialize sotagliflozin in the Licensed Territory.

Viatris is responsible for all regulatory and commercialization activities for sotagliflozin in the Licensed Territory as well as conducting any additional clinical trials required to obtain such regulatory approvals.

Lexicon and Viatris have agreed to enter into a manufacturing and supply agreement pursuant to which Lexicon will supply the development and commercial requirements of sotagliflozin of Viatris, and Viatris will pay an agreed upon transfer price for such supply.

Under the License Agreement, Lexicon received an upfront payment of $ 25.0 million and is also eligible to receive (a) up to an aggregate of $ 12.0 million upon the achievement of specified regulatory milestones, (b) up to an aggregate of $ 185.0 million upon the achievement of specified sales milestones and (c) tiered royalties ranging from low double-digit to upper-teens percentages of annual net sales of sotagliflozin in the Licensed Territory.

In accordance with ASC 606, Revenue from Contracts with Customers , the Company recognized the upfront cash payment of $ 25.0 million as licensing revenue for the year ended December 31, 2024 at the outset of the License Agreement, based on the satisfaction of its performance obligation upon delivery of an exclusive right and license under its patent rights and know-how to develop and commercialize sotagliflozin in the Licensed Territory.

Any future milestone or royalty payments that the Company would be eligible to receive were excluded from the upfront payment, as all milestone or royalty amounts were fully constrained based on the probability of achievement.

Any future milestone payments or royalties the Company is entitled to receive upon achievement of future sales of the licensed products by Viatris will be recognized when the related sales occur.

Pursuant to ASC 606, the Company identified the exclusive right and license under its patent rights and know-how to develop and commercialize sotagliflozin in the Licensed Territory as one distinct performance obligation.

The Company further evaluated its stated intent in the Licensing Agreement to enter into a separate manufacturing and supply agreement related to supply of the licensed products to Viatris.

The Company concluded for accounting purposes that there was no separate material right or performance obligation related to the separate manufacturing agreement at the inception of the Licensing Agreement primarily given (i) supply agreement pricing subject to reasonable and customary contract manufacturing terms reflecting a reasonable stand-alone selling price without a significant and incremental discount and (ii) no obligation by Viatris to purchase any minimum amount or quantities of the supply from the Company.

The Company also concluded that the Licensing Agreement is not a collaborative agreement under ASC 808, Collaborative arrangements , as Viatris is responsible for all regulatory and commercialization activities for sotagliflozin in the Licensed Territory as well as conducting any additional clinical trials required to obtain such regulatory approvals.

Effective Tax Rate Reconciliation.

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State income taxes, tax rate change 2,922 ( 4,723 ) —

Write off of NOL carryovers due to expiration 8,111 — —

Change in valuation allowance 30,762 44,410 19,543

Income tax benefit $ — $ — $ —

(1) Other is primarily comprised of expiring NOLs and nondeductible expenses for the year ended December 31, 2023 and nondeductible expenses for the years ended December 31, 2022 and 2021.

(1) Other is primarily comprised of nondeductible expenses and expiring attribute carryovers for the year ended December 31, 2024, expiring NOLs and nondeductible expenses for the year ended December 31, 2023 and nondeductible expenses for the year ended December 31, 2022.

Deferred Tax Assets and Liabilities.

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The tax years 2021 through 2023 remain open to examination by the Internal Revenue Service of the United Sates and the tax years 2020 through 2023 remain open to examination by various state tax authorities.

Goodwill is not subject to amortization, but is tested at least annually on its assessment date for impairment at the reporting unit level, which is the Company’s single operating segment.

There was no impairment of goodwill in 2023, 2022 or 2021.

Debt Obligations

Oxford Term Loans.

In March 2022, Lexicon and one of its subsidiaries entered into a loan and security agreement with Oxford Finance LLC (“Oxford”) that provides up to $ 150 million in borrowing capacity (the “Oxford Term Loans”).

The loan and security agreement was subsequently amended in August 2022, May 2023, June 2023 and December 2023.

The Company incurred debt issuance costs of $ 0.3 million in connection with the December 2023 amendment which extended the fourth tranche period and modified the existing financial covenant relating to net sales of INPEFA and the minimum cash and investments balance requirement.

In March 2024, the Company entered into a fifth amendment further modifying the existing financial covenant relating to net sales of INPEFA.

Oxford Term Loans Overview.

In March 2022, Lexicon and one of its subsidiaries entered into a loan and security agreement with Oxford Finance LLC (“Oxford”) (as subsequently amended) that provides up to $ 150 million in borrowing capacity (the “Oxford Term Loan s”).

The Oxford Term Loans are available in five tranches, each maturing in March 2029.

The first $ 25 million tranche was funded in March 2022, the second $ 25 million tranche was funded in December 2022 and the third $ 50 million tranche was funded in June 2023.

The first two $ 25 million tranches totaling $ 50 million were funded in 2022 and the third $ 50 million tranche was funded in June 2023.

The fourth $ 25 million tranche will be available for draw at Lexicon’s option upon the achievement of specified INPEFA net sales and until April 15, 2025.

An unused fee will be due in the event Lexicon does not draw the full amount available under the fourth tranche.

The fifth $ 25 million tranche is available for draw at Lexicon’s option, subject to Oxford’s consent, at any time prior to the expiration of the interest-only payment period as described below.

A final payment exit fee equal to 6 % of the amount funded under the Oxford Term Loans is due upon prepayment or maturity.

The final payment exit fee of $ 6 million as of December 31, 2023, in the aggregate for the three borrowed tranches, is recorded as a debt discount on the consolidated balance sheet.

An unused fee will be due in the event Lexicon does not draw the full amount if made available under the fourth tranche.

The fifth $ 25 million tranche is available for draw at Lexicon’s option, subject to Oxford’s consent, at any time prior to the expiration of the 60-month interest-only payment period with an amortization date of May 1, 2027 as described below.

As of December 31, 2024, the carrying value of the Oxford Term Loans on the consolidated balance sheet was $ 100.3 million, reflecting an unamortized discount of $ 6.7 million to the face value of long-term debt related to original debt issuance costs and other financing fees (including $ 1.3 million paid in 2024), the final payment exit fee described below, and the warrant fair value described below.

These costs are being amortized into interest and other expense.

A final payment exit fee of $ 7 million equal to 7 % of the amount funded under the Oxford Term Loans is due upon prepayment or maturity and is recorded as a debt discount on the consolidated balance sheet as of December 31, 2024.

Oxford Warrants.

Concurrent with the funding of the first three tranches, Lexicon granted Oxford warrants to purchase 420,673 shares of Lexicon’s common stock at an exercise price of $ 2.08 per share, 224,128 shares of Lexicon’s common stock at an exercise price of $ 1.95 per share and 183,824 shares of Lexicon’s common stock at an exercise price of $ 2.38 per share, respectively.

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The Company allocated the proceeds from each term loan tranche to the corresponding warrant using the relative fair value method and used the Black-Scholes model to calculate the fair value of the warrants.

As of December 31, 2023, the carrying value of the Oxford Term Loans on the consolidated balance sheet was $ 99.5 million, reflecting an unamortized discount of $ 6.5 million to the face value of long-term debt for the final payment exit fee, the warrant fair value, and debt issuance costs, which are being amortized into interest and other expense throughout the life of the term loan using the effective interest rate method.

These warrants reduced the carrying value of long-term debt and are classified as equity instruments in additional paid-in capital on the condensed consolidated balance sheet.

Interest and Principal Payments.

Monthly interest-only payments are due during an initial 60 -month period from the original March 2022 borrowing date.

The interest-only period will be followed by an amortization period extending through the maturity date.

The interest-only period will be followed by an amortization period extending through the maturity date with monthly principal payments beginning May 1, 2027.

Payments of $ 34.8 million, $ 52.2 million, and $ 20.0 million, including debt principal and final exit fee payments, will be due during the fiscal years ended December 31, 2027, December 31, 2028 and December 31, 2029, respectively, with respect to all borrowed loan tranches as of December 31, 2024.

Prior to the June 2023 amendment to the loan and security agreement, the Oxford Term Loans bore interest at a floating rate equal to the 30-day U.S.

Any prepayment of the Oxford Term Loans is subject to prepayment fees of up to 3 % which decline over the three years following the funding date of each loan tranche.

Following the June 2023 amendment to the Loan Agreement, the floating interest rate is currently based on the sum of (a) the 1-month CME Term Secured Overnight Financing Rate (SOFR), (b) 0.10 %, and (c) 7.90 % for the first and second tranches and 7.00 % for the third and fourth tranches.

Prior to June 2023, the Oxford Term Loans bore interest at a floating rate equal to the 30-day U.S.

Dollar LIBOR plus 7.90 %, but not less than 8.01 %, subject to additional interest if an event of default occurs and is continuing.

Following such amendment, the floating interest rate is based on the sum of (a) the 1-month CME Term Secured Overnight Financing Rate (SOFR), (b) 0.10 %, and (c) 7.90 % for the first and second tranches and 7 % for the third and fourth tranches.

During the year ended December 31, 2024, 2023 and 2022, the Company recognized interest expense of $ 14.8 million, $ 11.6 million and $ 2.8 million, respectively, including $ 1.8 million, $ 1.5 million and $ 0.6 million in amortization of discount and related debt issuance costs, respectively.

As of December 31, 2024, the weighted average interest rate of the Oxford Term Loans was 12.10 %.

During the year ended December 31, 2023, the Company recognized interest expense of $ 11.6 million, including $ 1.5 million in amortization of discount and related debt issuance costs.

Restrictive Provisions/Covenants.

If an event of default occurs and is continuing, Oxford may declare all amounts outstanding under the loan and security agreement to be immediately due and payable.

Additionally, Lexicon may prepay the Oxford Term Loans in whole at its option at any time.

Any prepayment of the Oxford Term Loans is subject to prepayment fees for up to three years after the funding of each tranche of the loans.

Lexicon’s obligations under the Oxford Term Loans are secured by a first lien security interest in all of the assets of the Company and its subsidiaries.

The loan and security agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default applicable to Lexicon and its subsidiaries.

In addition to the financial covenants, additional covenants include those restricting dispositions, fundamental changes to its business, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and subordinated debt.

The loan and security agreement includes a financial covenant which requires Lexicon to maintain a minimum cash and investments balance of $ 10 million until the achievement of specified INPEFA net sales.

The Loan Agreement includes a financial covenant which requires Lexicon to maintain a minimum unrestricted cash and investments balance of 50 % of the outstanding principal amount through June 30, 2026, tested monthly as of the last day of each month.

In addition, Lexicon is separately required to maintain a quarterly minimum unrestricted cash and investments balance of $ 10 million until

the achievement of specified INPEFA net sales (which will be satisfied by meeting the monthly minimum unrestricted cash and investments covenant noted above).

Upon funding of the fourth tranche, the minimum cash and investments balance will increase to $ 25 million.

The loan and security agreement includes a separate financial covenant relating to net sales of INPEFA as noted above.

The Company was in compliance with its debt covenants as of December 31, 2023, and has classified its debt as long-term based on its intent and ability to refinance with completed equity financing (see Note 13) if the Company is unable to meet these financial covenants within one year .

The Loan Agreement also includes a separate financial covenant relating to net product revenue which will be effective as of the quarter ending June 30, 2026.

The Company was in compliance with its debt covenants as of December 31, 2024.

Commitments and Contingencies

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Lexicon’s operating leases include leases of office space in The Woodlands, Texas and Bridgewater, New Jersey that will expire in August 2025 and January 2034, respectively.

The Texas lease provides for escalating yearly base rent payments which started at $ 506,000 and increase to $ 557,000 in the final year of the lease.

The Texas lease provides for escalating yearly base rent payments which are $ 557,000 for 2025, the final year of the lease.

The New Jersey lease provides for escalating yearly base rent payments which started at $ 820,000 and increase to $ 986,000 in the final year of the lease.

In July 2024, Lexicon entered into a new lease agreement for the existing office space in The Woodlands, Texas.

The term of the lease begins September 2025, extends through January 2031 and provides for escalating yearly base rent payments starting at $ 774,000 and increasing to $ 875,000 in the final year of the lease and total undiscounted cash payments of $ 4.1 million.

Under its lease agreements, Lexicon is obligated to pay property taxes, insurance, and maintenance costs.

As of December 31, 2023 and 2022, the right-of-use assets for the office space leases had a balance of $ 5.5 million and $ 6.4 million, respectively, which are included in operating lease right-of-use-assets in the consolidated balance sheet.

Current and long-term liabilities as of December 31, 2023, relating to the leases were $ 1.3 million and $ 5.3 million, respectively, which are included in accrued liabilities and long-term operating lease liabilities in the consolidated balance sheet, respectively.

Current and long-term liabilities as of December 31, 2022, relating to the leases were $ 1.3 million and $ 5.4 million, respectively, which are included in accrued liabilities and long-term operating lease liabilities in the consolidated balance sheet, respectively.

During the years ended December 31, 2023 and 2022, the Company incurred lease expense of $ 1.6 million and $ 1.8 million, respectively.

As of December 31, 2024 and 2023, the right-of-use assets for the office space leases of $ 4.8 million and $ 5.5 million, respectively, are separately included in operating lease right-of-use-assets in the consolidated balance sheet.

Current liabilities relating to the leases are included in accrued liabilities in the consolidated balance sheet (as further described in Note 5) and long-term liabilities of $ 4.6 million and $ 5.3 million, respectively, as of December 31, 2024 and 2023, are included in other long-term liabilities in the consolidated balance sheet.

During the years ended December 31, 2024 and 2023, the Company incurred lease expense of $ 1.6 million each year.

During the years ended December 31, 2024 and 2023, the Company made cash payments for lease liabilities of $ 1.4 million and $ 0.8 million, respectively.

As of December 31, 2023 and 2022, the weighted-average remaining lease terms were 9 years and 9.5 years, respectively, with weighted-average discount rates of 9.6 % for each year.

As of December 31, 2024 and 2023, the weighted-average remaining lease terms were 8.6 years and 9 years, respectively, with weighted-average discount rates of 9.7 % and 9.6 %, respectively.

The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at December 31, 2024:

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Exercisable at end of year 7,518 $ 4.33

The weighted average estimated grant date fair value of stock options granted during the years ended December 31, 2023, 2022 and 2021 were $ 1.78 , $ 2.30 and $ 4.85 , respectively.

The weighted average estimated grant date fair value of stock options granted during the years ended December 31, 2024, 2023 and 2022 was $ 1.54 , $ 1.78 and $ 2.30 , respectively.

The weighted average remaining contractual term of stock options outstanding and exercisable was 7.5 and 6.0 years, respectively, as of December 31, 2024.

At December 31, 2023, the aggregate intrinsic value of the outstanding stock options was $ 0.4 million.

At December 31, 2023, the intrinsic value of exercisable stock options was $ 0 .

At December 31, 2024, there was no aggregate intrinsic value of the outstanding or exercisable stock options.

The fair value of stock options is estimated at the date of grant using the Black-Scholes method requiring the input of subjective assumptions.

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The matching contributions totaled $ 2.3 million, $ 1.2 million and $ 0.7 million in the years ended December 31, 2024, 2023 and 2022, respectively.

Company contributions are vested based on the employee’s years of service, with full vesting after four years of service.

Prior to January 1, 2025, matching company contributions vested based on an employee’s years of service over a four-year period.

As of January 1, 2025, the Company fully vested all company matching contributions and will vest future company matching contributions immediately.

Other Capital Agreements

Common Stock.

In June 2023, Lexicon sold an aggregate of 55,288,460 shares of its common stock at a price of $ 2.60 per share in a public offering and concurrent private placement to an affiliate of Invus, L.P., resulting in net proceeds of approximately $ 139 million, after deducting underwriting discounts and commissions and offering expenses.

In August 2022, Lexicon sold an aggregate of 39,100,000 shares of its common stock at a price of $ 2.50 per share in a public offering and concurrent private placement to two affiliates of Invus, L.P., resulting in net proceeds of $ 94.2 million, after deducting underwriting discounts and commissions and offering expenses.

In January 2021, Lexicon sold 2,000,000 shares of its common stock at a price of $ 8.463 per share under a previous Open Market Sale Agreement ™ with Jefferies LLC, resulting in net proceeds of $ 16.4 million.

In August and September 2021, Lexicon sold an aggregate of 4,176,953 shares of its common stock at a price of $ 4.732 per share under the sales agreement, resulting in net proceeds of $ 19.1 million.

The net proceeds from each of these sales are reflected as issuances of common stock in the accompanying financial statements.

Convertible Preferred Stock.

On March 11, 2024, Lexicon entered into an agreement with certain accredited investors pursuant to which the Company agreed to sell 2,304,147 shares of its Series A Convertible Preferred Stock, par value $ 0.01 per share, in a private placement at a price of $ 108.50 per share.

The Company received net proceeds of approximately $ 242 million, after deducting placement agent fees and offering expenses from the private placement offering.

Each share of preferred stock is convertible into 50 shares of common stock.

The Company received net proceeds of $ 241.3 million, after deducting placement agent fees and offering expenses from the private placement offering.

An affiliate of Invus, L.P.

elected to participate on the same terms as each other purchaser on a pro rata basis and also agreed to vote at the Company’s 2024 annual meeting of stockholders in favor of the approval of an amendment to the Company’s certificate of incorporation increasing the total authorized common shares thereunder from 300,000,000 to 450,000,000 shares (the “New Charter”).

Following the approval of the New Charter by the Company’s shareholders, the adoption of the New Charter by the Company’s board of directors, and the filing and acceptance of the New Charter by the Secretary of State of Delaware, each share of preferred stock will automatically convert into 50 shares (subject to adjustments) of common stock.

On May 10, 2024, following the approval of the New Charter by the Company’s shareholders, the adoption of the New Charter by the Company’s board of directors, and the filing and acceptance of the New Charter by the Secretary of State of Delaware, each share of preferred stock was converted into 50 shares of common stock at par value, or 115,207,350 shares in the aggregate.

Common Stock.

Segment Information

Lexicon operates as a single reportable segment, primarily focusing on the discovery, development and commercialization of pharmaceutical products for the treatment of human disease.

The chief operating decision maker (“CODM”) is the Company’s chief executive officer (“CEO”).

The CEO manages and allocates resources on a total company basis by assessing the overall level of resources available and how to best deploy these resources across research and development projects in line with the Company’s long-term company-wide strategic goals.

The CEO evaluates single-segment consolidated financial information against budget for purposes of making operating decisions, planning and forecasting for future periods, and deciding the level of investment in the Company’s various operating activities and other capital allocation activities.

The CODM assesses financial performance based on consolidated net income (loss) (as reported on the consolidated statement of comprehensive loss).

The CEO also uses consolidated cash and cash equivalents and short-term investments (which can be found on our Consolidated Balance Sheets) as a measure of segment assets for allocating resources.

Summary of segment net loss, including segment expenses were as follows:

Years Ended December 31,

2024 2023 2022

(in thousands)

Net product revenue $ 6,001 $ 1,110 $ —

Licensing revenue 25,000 — —

Royalties and other revenue 80 94 139

Total revenues 31,081 1,204 139

Operating expenses:

Cost of sales 616 85 —

Research and development 77,549 53,748 48,268

Sales and marketing 97,265 77,561 19,166

General and administrative 26,991 25,786 21,649

Other segment expense (1) (2)

25,777 15,774 11,816

Total operating expenses 228,198 172,954 100,899

Loss from operations ( 197,117 ) ( 171,750 ) ( 100,760 )

Interest and other expense ( 15,579 ) ( 13,101 ) ( 2,780 )

Interest income and other, net 12,293 7,732 1,596

Net loss $ ( 200,403 ) $ ( 177,119 ) $ ( 101,944 )

(1) For the years ended December 31, 2024, 2023 and 2022, other segment expense includes stock compensation of $ 5.8 million, $ 5.1 million and $ 4.3 million related to research and development personnel, respectively;

$ 2.0 million, $ 2.3 million and $ 0.5 million related to sales and marketing personnel, respectively;

and $ 5.7 million, $ 6.9 million and $ 6.8 million related to general and administrative personnel.

(2) Other segment expenses include severance costs of $ 1.1 million and $ 0.3 million related to research and development personnel for the years ended December 31, 2024 and 2022, respectively;

$ 9.3 million and $ 1.4 million in 2024 and 2023 related to sales and marketing personnel, respectively;

and $ 1.9 million and $ 0.04 million related to general and administrative personnel in 2024 and 2023, respectively.

Significant Customers.

In support of the commercial launch of INPEFA in 2023, the Company entered into distribution agreements with wholesalers and limited retail pharmacies.

The Company’s net product sales are generated from sales to these customers.

In 2024 and 2023, twelve United States-based customers accounted for all of the Company’s net product revenue and one customer accounted for royalties and other revenues.

Three large wholesalers accounted for greater than 10% of total net product revenues and in the aggregate accounted for greater than 85 % of total revenues for both 2024 and 2023.

Net product revenue for each of the three wholesalers were $ 2.3 million, $ 1.4 million and $ 1.4 million in 2024 and $ 0.4 million, $ 0.3

million and $ 0.3 million in 2023.

In 2022 the Company’s revenues were solely derived from royalties and other revenues from one customer.

For further information regarding the Company’s licensing revenue agreement, see Note 7.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures