What changed in this filing

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Item 9A. Controls and Procedures

2026-03-05 compared with 2025-03-07 · 162 added, 183 removed, 663 unchanged (34% of the section changed)

11 unchanged sentences

Changes in Internal Control Over Financial Reporting

Subsequent to our evaluation described above, there were no significant changes in internal controls or other factors during the fiscal quarter ended December 31, 2024 that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

1 unchanged sentence

During the three months ended December 31, 2025, 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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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 — Certificate of Designations dated February 2, 2026 (filed as Exhibit 3.3 to the Company’s Current Report on Form 8-K dated January 29, 2026 and incorporated by reference herein).

3.3 — 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).

15 unchanged sentences

4.7 — Supplement No.

3 to the Transaction Agreements , dated December 16, 2020, with Invus, L.P.

3 to Transaction Agreements , dated December 16, 2020, with Invus, L.P.

and Invus C.V.

1 unchanged sentence

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 — 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.

Granowitz, M.D., Ph.D.

(filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2021 and incorporated by reference herein).

10.4 — Employment Agreement , dated July 12, 2001, with Alan J.

(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).

†10.1 — Management Severance Plan , dated as of March 4, 2025, (filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2024 and incorporated by reference herein).

10.2 — 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.

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10.3 — 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).

10.4 — 2017 Equity Incentive Plan, as amended (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 2, 2025 and incorporated by reference herein).

10.5 — 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 June 2, 2025 and incorporated by reference herein).

*10.6 — 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

10.7 — Form of Restricted Stock Unit 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, 2024 and incorporated by reference herein).

10.8 — Form of Notice of Stock Option Grant to Directors under the 2017 Non-Employee Directors’ Equity Incentive Plan (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019 and incorporated by reference herein).

1 unchanged sentence

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

(filed as Exhibit 10.15 to the

Company’s Annual Form 10-K for the period ended December 31, 2024 and incorporated

by reference herein).

†10.11 Exclusive License Agreement , dated March 27, 2025, with Novo Nordisk A/S.

(filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025 and incorporated by reference herein).

10.12 — 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).

1 unchanged sentence

†10.14 — Second Amendment, dated November 2, 2016, to Collaboration and License Agreement, dated December 17, 2003, with Bristol-Myers Squibb Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 2, 2016 and incorporated by reference herein).

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).

10.15 — 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).

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†10.22 — 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).

†10.23 — Seventh Amendment to Loan and Security Agreement , dated March 27, 2025, 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 March 27, 2025 and incorporated by reference herein).

10.24 — Purchase Agreement , dated as of January 29, 2026, with Artal Participations S.à r.l., Invus Public Equities Advisors, LLC, Invus Global Management, LLC, Invus US Partners LLC, Invus Advisors, L.L.C., Invus Public Equities, L.P., Invus, Siren, LLC, Ulys, L.L.C and Mr.

Raymond Debbane (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 29, 2026 and incorporated by reference herein).

10.25 — Preferred Stock Purchase Agreement , dated January 29, 2026, with Artal Participations S.à r.l.

(filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 29, 2026 and incorporated by reference herein).

*19.1 — Insider Trading and Confidentiality Policy

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(Principal Executive Officer) March 5, 2026

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

/s/ KRISTEN L.

ALEXANDER Vice President, Finance and Accounting

(Principal Accounting Officer) March 7, 2025

COIANTE Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) March 5, 2026

/s/ RAYMOND DEBBANE Chairman of the Board of Directors March 5, 2026

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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.

Clinical trial expenses are accrued based upon an assessment of progress of the clinical studies for services that have been performed, the number of patients enrolled over the duration of the study, and milestones.

The accrual for these third-party clinical trial research and development expenses includes estimates of services completed.

1 unchanged sentence

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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Total current assets 101,895 246,193

Property and equipment, net of accumulated depreciation and amortization of $ 2,086 and $ 4,538 , respectively

Property and equipment, net 1,863 2,484

Goodwill 44,543 44,543

Operating lease right-of-use-assets 7,318 4,832

Restricted cash 29,000 —

Other assets 368 368

4 unchanged sentences

Accrued liabilities 13,189 30,447

Current portion of long-term debt 4,595 —

Total current liabilities 20,867 45,248

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5,000,000 shares authorized;

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

2,304,147 Series A Convertible Preferred shares issued and none outstanding

Common stock, $ 0.001 par value;

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Interest and other expense ( 8,339 ) ( 15,579 ) ( 13,101 )

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

Interest income and other 6,909 12,293 7,732

Net loss $ ( 50,341 ) $ ( 200,403 ) $ ( 177,119 )

2 unchanged sentences

Other comprehensive loss:

Unrealized gain (loss) on investments 88 459 ( 418 )

Unrealized (loss) gain on investments ( 89 ) 88 459

Comprehensive loss $ ( 50,430 ) $ ( 200,315 ) $ ( 176,660 )

7 unchanged sentences

Balance at December 31, 2022 189,214 $ 189 — $ — $ 1,709,144 $ ( 1,589,720 ) $ ( 428 ) $ ( 2,061 ) $ 117,124

Stock-based compensation — — — — 11,520 — — — 11,520

Issuance of common stock under Equity Incentive Plans 32 — — — — — — — —

Issuance of common stock, net of issuance fees 39,100 39 — — 94,166 — — — 94,205

Issuance of equity-classified warrants — — — — 307 — — — 307

Issuance of treasury stock — — — — ( 6,321 ) — — 6,321 —

Repurchase of common stock — — — — — — — ( 864 ) ( 864 )

Net loss — — — — — ( 101,944 ) — — ( 101,944 )

Unrealized loss on investments — — — — — — ( 418 ) — ( 418 )

Balance at December 31, 2022 189,214 $ 189 — $ — $ 1,709,144 $ ( 1,589,720 ) $ ( 428 ) $ ( 2,061 ) $ 117,124

Issuance of equity-classified warrants — — — — 307 — — — 307

Stock-based compensation — — — — 14,340 — — — 14,340

1 unchanged sentence

Issuance of common stock under Equity Incentive Plans 1,291 1 — — ( 1 ) — — — —

Repurchase of common stock — — — — — — — ( 824 ) ( 824 )

Payments for tax withholding on share-based compensation vesting — — — — — — — ( 824 ) ( 824 )

Net loss — — — — — ( 177,119 ) — — ( 177,119 )

4 unchanged sentences

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

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

Payments for tax withholding on share-based compensation vesting — — — — — — — ( 1,730 ) ( 1,730 )

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

2 unchanged sentences

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

Stock-based compensation — — — — 12,517 — — — 12,517

Issuance of common stock under Equity Incentive Plans 2,828 3 — — 70 — — — 73

Payments for tax withholding on share-based compensation vesting — — — — — — — ( 572 ) ( 572 )

Net loss — — — — — ( 50,341 ) — — ( 50,341 )

Unrealized loss on investments — — — — — — ( 89 ) — ( 89 )

Balance at December 31, 2025 365,848 $ 366 — $ — $ 2,129,912 $ ( 2,017,583 ) $ 30 $ ( 5,187 ) $ 107,538

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

10 unchanged sentences

Amortization of debt-related costs 1,700 1,845 1,774

Loss on disposal of property and equipment — — 3

Accretion of marketable securities purchased at a discount ( 3,712 ) ( 9,305 ) ( 5,617 )

1 unchanged sentence

Changes in operating assets and liabilities:

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

Decrease (increase) in inventories 150 ( 381 ) —

Decrease (increase) in accounts receivable 1,089 ( 2,463 ) ( 982 )

(Increase) decrease in inventories ( 50 ) 150 ( 381 )

Decrease (increase) in prepaid expenses and other current assets 1,532 598 ( 2,899 )

Decrease in other long-term assets 757 1,152 467

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

(Decrease) increase in accounts payable and other liabilities ( 30,222 ) 14,801 6,454

Net cash used in operating activities ( 67,851 ) ( 178,780 ) ( 161,897 )

3 unchanged sentences

Maturities of investments 252,858 314,400 173,870

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

Net cash provided by (used in) investing activities 113,020 ( 15,378 ) ( 49,943 )

Cash flows from financing activities:

2 unchanged sentences

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

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

Payments for tax withholding on share-based compensation vesting ( 572 ) ( 1,730 ) ( 824 )

Repayment of debt borrowings ( 48,000 ) — —

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

Other debt financing fees — ( 1,307 ) —

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

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

Cash and cash equivalents at end of year $ 66,656 $ 22,465 $ 46,345

Net cash (used in) provided by financing activities ( 48,499 ) 238,349 187,960

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 3,330 ) 44,191 ( 23,880 )

Cash, cash equivalents, and restricted cash at beginning of year 66,656 22,465 46,345

Cash, cash equivalents, and restricted cash at end of year $ 63,326 $ 66,656 $ 22,465

Supplemental disclosure of cash flow information:

1 unchanged sentence

Supplemental disclosure of noncash investing and financing activities:

Right-of-use assets obtained in exchange for operating lease liability $ — $ — $ 5,206

Right-of-use assets obtained in exchange for operating lease obligations $ 3,243 $ — $ —

Issuance of equity-classified warrants $ — $ — $ 307

Issuance of treasury stock $ — $ — $ 6,321

Accrual of deferred financing costs $ — $ — $ 250

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(“Lexicon” or the “Company”) is a Delaware corporation incorporated on July 7, 1995.

Lexicon was organized to discover the functions and pharmaceutical utility of genes and use those gene function discoveries in the discovery and development of pharmaceutical products for the treatment of human disease.

Lexicon is a biopharmaceutical company with a mission of pioneering medicines that transform patients’ lives.

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.

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Intercompany transactions and balances are eliminated in consolidation.

Lexicon has made certain reclassification adjustments to conform prior-period amounts to the current presentation.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

7 unchanged sentences

For additional segment disclosures, see Note 14.

Cash, Cash Equivalents and Short-Term Investments.

Cash, Cash Equivalents, Restricted Cash and Short-Term Investments.

Lexicon considers all highly-liquid investments with original maturities of three months or less to be cash equivalents.

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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.

An impairment exists when the carrying amount of goodwill exceeds its implied fair value.

An impairment exists when the carrying amount of goodwill exceeds its fair value.

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.

6 unchanged sentences

As the implicit rate is not determinable in its leases, Lexicon uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments.

Inventory is comprised of INPEFA, the Company’s approved product that it is commercializing in the United States.

Inventory is comprised of INPEFA, the Company’s approved product in the United States.

Inventories are determined at the lower of cost or market value, with cost determined under the specific identification method.

2 unchanged sentences

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

(b) identify the performance obligation in the contract;

(b) identify the performance obligations in the contract;

(d) allocate the transaction price to the performance obligation in the contract, and (e) recognize revenue when (or as) the Company satisfies the performance obligation.

(d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the Company satisfies the performance obligation.

The Company applies this five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

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For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the contract milestones remaining.

For clinical studies, expenses are accrued based upon the number of patients enrolled and the completion of milestones.

For clinical studies, expenses are accrued based upon an assessment of progress of the clinical studies for services that have been performed, the number of patients enrolled over the duration of the study, and milestones.

The Company monitors patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to the Company by the vendors and clinical site visits.

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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 when the company has a net loss because they are antidilutive.

Recent Accounting Pronouncements Issued But Not Yet Adopted.

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.

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

Cash, Cash Equivalents and Investments

The fair value of cash and cash equivalents and investments held at December 31, 2024 and 2023 are as follows:

Cash, Cash Equivalents, Restricted Cash and Investments

The fair value of cash and cash equivalents, restricted cash and investments held at December 31, 2025 and 2024 are as follows:

As of December 31, 2025

2 unchanged sentences

Cash and cash equivalents $ 34,326 $ — $ — $ 34,326

Restricted cash 29,000 — — 29,000

Total cash and cash equivalents and restricted cash $ 63,326 $ — $ — $ 63,326

Securities maturing within one year:

2 unchanged sentences

Total short-term investments $ 61,875 $ 30 $ ( 1 ) $ 61,904

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

Total cash and cash equivalents, restricted cash and short-term investments $ 125,201 $ 30 $ ( 1 ) $ 125,230

As of December 31, 2024

2 unchanged sentences

Cash and cash equivalents $ 66,656 $ — $ — $ 66,656

Restricted cash — — — —

Total cash and cash equivalents and restricted cash $ 66,656 $ — $ — $ 66,656

Securities maturing within one year:

2 unchanged sentences

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

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

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

As of December 31, 2025 and 2024, Lexicon’s investments in an unrealized loss position had an estimated fair value of $ 2.5 million and $ 12.9 million, respectively.

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The inputs or methodology used for valuing securities are not necessarily an indication of the credit risk associated with investing in those securities.

The following tables provide the fair value measurements of applicable Company assets that are measured at fair value on a recurring basis according to the fair value levels defined above as of December 31, 2024 and 2023.

The following tables provide the fair value measurements of applicable Company assets that

are measured at fair value on a recurring basis according to the fair value levels defined above as of December 31, 2025 and 2024.

There were no transfers between Level 1 and Level 2 during the periods presented.

5 unchanged sentences

Short-term investments 39,026 22,878 — 61,904

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

Restricted cash 29,000 — — 29,000

Total cash and cash equivalents, short-term investments and restricted cash $ 102,352 $ 22,878 $ — $ 125,230

Assets at Fair Value

4 unchanged sentences

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

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.

Restricted cash — — — —

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

The carrying amount of 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.

The fair value of the Oxford Term Loans (see Note 9) is determined under Level 2 in the fair value hierarchy and approximates carrying value as the loans bear interest at a rate that approximates prevailing market rates for instruments with similar characteristics.

Supplemental Financial Information

The following tables show the Company’s additional balance sheet information as of December 31, 2024 and 2023:

As of December 31,

(in thousands)

Raw materials $ 103 $ —

Work-in-progress — 100

Finished goods 128 281

Inventory $ 231 $ 381

Accrued Liabilities.

As of December 31,

(in thousands)

Accrued Liabilities:

Accrued research and development services $ 2,932 $ 12,251

3 unchanged sentences

Accrued liabilities $ 13,189 $ 30,447

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.

As of December 31, 2024, $ 8.8 million of severance is included in accrued compensation and benefits within accrued liabilities on the consolidated balance sheet, all of which was paid prior to December 31, 2025.

Property and Equipment

10 unchanged sentences

Net property and equipment $ 1,863 $ 2,484

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.

Novo Nordisk .

In March 2025, the Company entered into an exclusive license agreement (the “Novo Nordisk License Agreement”) with Novo Nordisk A/S (“Novo Nordisk”) for the worldwide development, manufacturing and commercialization of LX9851, the Company’s preclinical drug candidate for obesity and associated cardiometabolic disorders.

Under the Novo Nordisk License Agreement, the Company granted Novo Nordisk an exclusive, worldwide, royalty-bearing right and license under its patent rights and know-how to develop, manufacture and commercialize LX9851.

The Company received an upfront payment of $ 45 million under the Novo Nordisk License Agreement in April 2025, a $ 10 million milestone payment in February 2026 and is eligible to receive (a) up to an aggregate of $ 475 million upon the achievement of additional specified regulatory and commercial launch milestones and (b) up to an aggregate of $ 475 million upon the achievement of specified sales milestones.

The Company is also entitled to tiered, escalating royalties ranging from single-digit to low-double-digit percentages of annual net sales of LX9851, subject to customary royalty reduction provisions.

Under the Novo Nordisk License Agreement, the Company was also required to use commercially reasonable efforts to complete agreed-upon IND-enabling activities for LX9851 pursuant to an approved research plan and is required to provide clinical supply of LX9851 to Novo Nordisk at an agreed upon transfer price for a specified time period.

For accounting purposes, pursuant to ASC 606, Revenue from Contracts with Customers , the Company determined that its obligation to provide the licensed technology and perform the IND-enabling activities is a single combined performance obligation and allocated the entire $ 45 million upfront payment to this single combined performance obligation.

The Company identified the obligation to provide clinical supply of LX9851 at an agreed upon transfer price for a specified time period as a separate performance obligation, but allocated none of the $ 45 million upfront payment to the clinical supply obligation as the supply is being offered subject to reasonable and customary contract manufacturing terms at its stand-alone selling price.

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

The Company provided the licensed technology under its patent rights and know-how to develop, manufacture and commercialize LX9851 in March 2025.

During the year ended December 31, 2025, the Company recognized the full $ 45 million as licensing revenue on the consolidated statements of comprehensive loss based on completion of the IND-enabling activities.

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

The Company also concluded that the Novo Nordisk License Agreement is not a collaborative agreement under ASC 808, Collaborative Arrangements , as Novo Nordisk is responsible for all regulatory and commercialization activities for LX9851, as well as conducting any additional clinical trials required to obtain such regulatory approvals.

In October 2024, Lexicon entered into an exclusive license agreement (the “Viatris 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.

Under the Viatis 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.

Lexicon and Viatris have entered 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 Viatris 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, the Company recognized the upfront cash payment of $ 25 million as licensing revenue for the year ended December 31, 2024 at the outset of the Viatris 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.

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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.

The Company further evaluated its stated intent in the Viatris 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 Viatris 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 Viatris Licensing Agreement is not a collaborative agreement under ASC 808, 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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Year Ended December 31, 2025

2024 2023 2022

Amount Percent

(in thousands)

Federal Statutory Tax Rate $ ( 10,572 ) 21.00 %

Nontaxable or Nondeductible Items

Incentive Stock Options 2,449 ( 4.86 ) %

Research and Development Credit ( 944 ) 1.87 %

Changes in Valuation Allowances 8,872 ( 17.62 ) %

Other 195 ( 0.39 ) %

Total $ — — %

Year Ended December 31,

(in thousands)

Expected income tax expense (benefit) at 21%

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Change in valuation allowance 30,762 44,410

Other 454 586

Income tax benefit $ — $ —

(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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After assessing both the negative and the positive evidence, the Company concluded that it should continue to maintain the valuation allowance on net operating losses and other deferred tax assets as of December 31, 2025 given the significance of the weight of the negative evidence.

Based on recent financial performance and future projections, the Company could record a reversal of all, or a portion of the valuation allowance associated with U.S.

Based on recent financial performance and future projections, the Company could record a reversal of all, or a portion

of the valuation allowance associated with U.S.

deferred tax assets in future periods.

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Significant judgment is required in making these assessments to maintain or reverse valuation allowances and, to the extent future expectations change the Company would have to assess the recoverability of these deferred tax assets at that time.

Based on the federal tax law limits and the Company’s cumulative loss position, the Company concluded it was appropriate to establish a full valuation allowance for its net deferred tax assets until an appropriate level of profitability is sustained.

During the year ended December 31, 2024, the valuation allowance increased $ 30.8 million, primarily due to NOLs generated, increases in deferred tax assets associated with capitalized research and development expense and deferred tax assets for state jurisdictions.

Based on the applicable tax laws and the Company’s cumulative loss position, the Company concluded it was appropriate to establish a full valuation allowance for a majority of its deferred tax assets until an appropriate level of profitability is sustained.

During the year ended December 31, 2025, the federal and state valuation allowance increased $ 10.1 million, primarily due to NOLs generated.

As of December 31, 2025 and 2024, the Company did no t have any unrecognized tax benefits and had no accruals for interest or penalties related to income tax matters.

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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 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 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.

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

The Oxford Term Loans are available in five tranches, each maturing in November 2027.

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

Availability of the fourth $ 25 million tranche expired in April 2025.

The fifth $ 25 million tranche is available for draw at Lexicon’s option, subject to Oxford’s consent, at any time prior to December 1, 2026.

In March 2025, the Company entered into a seventh amendment to the loan and security agreement (the “Seventh Amendment”) with Oxford (a) providing for a prepayment to the lenders of $ 45 million and certain additional contingent future prepayments totaling $ 8 million, (b) modifying the amortization date and repayment amortization schedule under the loans under certain circumstances, (c) modifying the financial covenant relating to minimum cash as further described below and (d) eliminating the previous financial covenant relating to net sales of INPEFA, as well as certain other terms.

Interest, Principal Payments, and Carrying Value of Debt.

Monthly interest-only payments are due from the original March 2022 borrowing date followed by an amortization period extending through the maturity date with monthly principal payments beginning December 1, 2026.

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.

As of December 31, 2025, the weighted average interest rate of the Oxford Term Loans was 11.40 %.

Pursuant to the terms of the Seventh Amendment, (a) in April 2025, the Company repaid $ 45 million, including a pro-rata portion of the final payment exit fees, to Oxford on a pro-rata basis across each loan tranche, (b) in December 2025, the Company repaid an additional $ 3 million, including a pro-rata portion of the final payment exit fees, to Oxford on a pro-rata basis across each loan tranche and (c) in December 2025, the original amortization date of May 1, 2027 and original maturity date of March 1, 2029 were accelerated to December 1, 2026 and November 1, 2027, respectively.

Payments of $ 4.6 million and $ 54.4 million, including debt principal and final exit fee payments (equal to 7 % of the remaining amount funded under the Oxford Term Loans), will be due during the fiscal years ended December 31, 2026 and December 31, 2027, respectively, with respect to all borrowed loan tranches as of December 31, 2025.

As of December 31, 2025, the Company reflected $ 4.6 million of the outstanding principal in current maturities of long-term debt and the remaining carrying value of the Oxford Term Loans of $ 49.4 million in long-term debt on the consolidated balance sheet.

The carrying value above reflects an unamortized discount of $ 5.0 million to the face value of long-term debt related to debt issuance costs, the final payment exit fee, and the warrant fair value described below, which are being amortized into interest and other expense.

In February 2026, upon receipt of a $ 10 million milestone payment from Novo Nordisk (see note 7) and in accordance with the terms of the Seventh Amendment, the Company was required to repay an additional $ 5 million (including pro-rata final payment exit fees) to Oxford on a pro-rata basis across each loan tranche.

Additionally, Lexicon may elect to prepay the Oxford Term Loans in whole at its option at any time subject to prepayment fees which have declined to 1 percent of a portion of the outstanding amounts of each loan tranche.

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.

Subject to and upon funding of the fourth tranche, Lexicon will grant Oxford a warrant to purchase shares of its common stock having a value equal to 1.75 % of such tranche, as determined by reference to a 10 -day average closing price of the shares, and having an exercise price equal to such average closing price.

respectively.

All warrants are exercisable for five years from their respective grant dates and feature a net cashless exercise provision.

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.

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 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.

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.

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 %.

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

Restrictive Provisions/Covenants.

Among other restrictive provisions and covenants, the loan and security agreement includes a financial covenant which requires the Company to maintain a minimum balance of unrestricted cash, cash equivalents.

short-term investments, and restricted cash, inclusive of a required minimum amount of $ 29 million to be maintained in a blocked account, in an amount equal to not less than the greater of (a) 50 % of the outstanding principal amount of the Oxford Term Loans and (b) the required minimum amount of $ 29 million.

As of December 31, 2025, the Company reflected the $ 29 million minimum cash in the blocked account as restricted cash on the consolidated balance sheet.

The Loan Agreement also 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 covenant, additional covenants include those restricting dispositions, fundamental changes to its business, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and subordinated debt.

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.

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.

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

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 Company was in compliance with its debt covenants as of December 31, 2025.

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Operating Lease Obligations.

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 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.

Lexicon’s operating leases include leases of office space in The Woodlands, Texas and Bridgewater, New Jersey that will expire in January 2031 and January 2034, respectively.

In September 2025, Lexicon began a new lease agreement for 25,000 square feet of office space in The Woodlands, Texas.

The term of the new Texas lease extends through January 2031 and provides for escalating annual office rent and other fixed payments starting at approximately $ 0.8 million and increasing to approximately $ 0.9 million in the final year of the lease for total undiscounted cash payments of $ 4.5 million.

In September 2025, the Company recorded a right-of use asset and right-of-use liability of approximately $ 3.2 million related to this new office lease based on the present value of future lease payments to be made over the expected lease term using a discount rate of approximately 11.9 %.

The New Jersey lease provides for escalating yearly base rent payments which started at approximately $ 0.8 million and increase to approximately $ 1.0 million in the final year of the lease.

As of December 31, 2025 and 2024, the right-of-use assets for the office space leases of $ 7.3 million and $ 4.8 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 $ 6.6 million and $ 4.6 million, respectively, as of December 31, 2025 and 2024, 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.

During the years ended December 31, 2025 and 2024, the Company incurred lease expense of $ 1.7 million and $ 1.6 million, respectively.

During the years ended December 31, 2025 and 2024, the Company made cash payments for lease liabilities of $ 1.4 million each year.

As of December 31, 2025 and 2024, the weighted-average remaining lease terms were 7.0 years and 8.6 years, respectively, with weighted-average discount rates of 10.5 % and 9.7 %, respectively.

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Long-term operating lease liability $ 6,592

Employment Arrangements.

Lexicon has entered into employment arrangements with certain of its corporate officers.

Under the arrangements, each officer receives a base salary, subject to adjustment, with an annual discretionary bonus based upon specific objectives to be determined by the compensation committee.

The employment arrangements are at-will and some contain non-competition agreements.

Some of the arrangements also provide for certain severance payments for either six or 12 months and, in some cases, payment of a specified portion of the officer’s bonus target for such year, in the event of a specified termination of the officer’s employment.

Legal Proceedings.

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The Company has a policy of using either authorized and unissued shares or treasury shares, including shares acquired by purchase in the open market or in private transactions, to satisfy equity award exercises.

As of December 31, 2024, options to purchase 15,388,915 shares and 6,299,757 restricted stock

units were outstanding, 2,336,349 shares had been issued upon the exercise of stock options, 8,700,164 shares had been issued pursuant to restricted stock units and 217,148 shares had been issued pursuant to stock bonus awards or restricted stock awards granted under the aggregate of both plans.

As of December 31, 2025, options to purchase 20,738,093 shares and 15,468,772 restricted stock units were outstanding, 2,403,766 shares had been issued upon the exercise of stock options, 11,460,660 shares had been issued pursuant to restricted stock units and 217,148 shares had been issued pursuant to stock bonus awards or restricted stock awards granted under the aggregate of both plans.

For the years ended December 2025, 2024, and 2023 stock-based compensation costs was $ 12.5 million, $ 13.5 million, and $ 14.3 million, respectively.

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Stock Options.

The following is a summary of stock option activity under Lexicon’s equity incentive plans for the year ended December 31, 2024:

As of December 31, 2024

(in thousands, except exercise price data) Options Weighted Average Exercise Price

Outstanding at beginning of year 18,705 $ 3.93

The following is a summary of stock option activity under Lexicon’s equity incentive plans:

Options Weighted Average Exercise Price

(in thousands, except exercise price data)

Outstanding at December 31, 2024 15,389 $ 3.20

Granted 10,594 0.69

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Forfeited ( 4,868 ) 2.84

Outstanding at end of year 15,389 3.20

Exercisable at end of year 7,518 $ 4.33

Outstanding at December 31, 2025 20,738 1.96

Exercisable at December 31, 2025 7,716 $ 3.57

The weighted average estimated grant date fair value of stock options granted during the years ended December 31, 2025, 2024 and 2023 was $ 0.60 , $ 1.54 and $ 1.78 , respectively.

The weighted average remaining contractual term of stock options outstanding and exercisable was 7.8 and 6.1 years, respectively, as of December 31, 2025.

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

At December 31, 2025, the aggregate intrinsic value of the outstanding stock options was $ 4.6 million.

At December 31, 2025, the intrinsic value of exercisable stock options was $ 0.04 million.

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 restricted stock granted in 2025, 2024 and 2023 had weighted average grant date fair values of $ 0.62 , $ 1.79 and $ 2.36 per share, respectively.

The following is a summary of restricted stock units activity under Lexicon’s stock-based compensation plans for the year ended December 31, 2024:

The following is a summary of restricted stock units activity under Lexicon’s stock-based compensation plans:

Shares Weighted Average Grant Date Fair Value

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Outstanding at December 31, 2025 15,469 $ 0.96

During the year ended December 31, 2022, the Company issued $ 6.3 million of Treasury shares in lieu of issuing additional authorized common shares in order to satisfy the annual vesting of restricted stock units for its employees and officers.

Lexicon maintains a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code.

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Other Capital Agreements

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 $ 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”).

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.

2026 Common and Series B Preferred Stock Issuance.

In February 2026, Lexicon sold approximately 34,089,403 shares of its common stock in an underwritten public offering for $ 1.30 per share resulting in net proceeds of approximately $ 41.1 million (after deducting underwriting discounts and commissions and other offering expenses).

Concurrent with the underwritten public offering, Lexicon sold to certain affiliates of Invus, L.P.

in a concurrent private placement (a) 22,400,000 shares of its common stock at a price of $ 1.30 per share and (b) 408,434.70 shares of its Series B Convertible Preferred Stock for $ 65.00 per share, which are convertible into 20,421,735 shares of common stock, resulting in aggregate gross proceeds of $ 55.6 million.

Each share of preferred stock will automatically convert into 50 shares of common stock following (a) the approval by the Company’s stockholders of a Seventh Amended and Restated Certificate of Incorporation (the “New Charter”) increasing the total authorized shares of common stock from 450,000,000 to a number (i) at least equivalent to the number required to permit the immediate conversion of the preferred stock and (ii) approved by affiliates of Invus, L.P., (b) the adoption of the New Charter by the Company’s board of directors and (c) the filing and acceptance of the New Charter with and by the Secretary of State of the State of Delaware, but subject to the receipt of all required consents, approvals or clearances under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

2024 Series A Preferred Stock Issuance.

In March 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 and received net proceeds of $ 241.3 million, after fees and offering expenses.

In May 2024, each share of preferred stock was converted into 50 shares of common stock at par value, or 115,207,350 shares in the aggregate.

2023 Common Stock Issuance.

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.

Segment Information

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and $ 6.2 million, $ 5.7 million and $ 6.9 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.

(2) For the year ended December 31, 2024, other segment expenses include severance costs of 1.1 million related to research and development personnel, $ 9.3 million related to sales and marketing personnel and $ 1.9 million related to general and administrative personnel.

Total severance costs included in other segment expenses for the year ended December 31, 2023 was $ 1.4 million, which related to sales and marketing personnel.

Significant Customers.

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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.

In 2025, 2024 and 2023, twelve United States-based customers accounted for all of the Company’s net product revenue.

Three large wholesalers accounted for greater than 10% of total net product revenues and in the aggregate accounted for greater than 80 % of total revenues for each year.

Net product revenue for each of the three wholesalers were $ 1.7 million, $ 1.1 million and $ 0.9 million in 2025, $ 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 2025, royalties and other revenues derived from two customers and in 2024 and 2023, one customer accounted for royalties and other revenues.

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