LEXICON PHARMACEUTICALS, INC. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of December 31, 2025 to ensure that the information required to be disclosed by us in the reports we file under the Securities Exchange Act is gathered, analyzed and disclosed with adequate timeliness, accuracy and completeness. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework) . Based on such assessment using those criteria, management concluded that, as of December 31, 2025, our internal control over financial reporting was effective. Changes in Internal Control Over Financial Reporting 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. Item 9B. Other Information Insider Trading Arrangements 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. 44 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. 45 PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item is hereby incorporated by reference from (a) the information appearing under the captions “Election of Directors,” “Stock Ownership of Certain Beneficial Owners and Management,” “Corporate Governance” and “Executive and Director Compensation” in our definitive proxy statement which involves the election of directors and is to be filed with the SEC pursuant to the Securities Exchange Act of 1934 within 120 days of the end of our fiscal year on December 31, 2025 and (b) the information appearing under Item 1 in Part I of this report. Item 11. Executive Compensation The information required by this Item is hereby incorporated by reference from the information appearing under the captions “Corporate Governance” and “Executive and Director Compensation” in our definitive proxy statement which involves the election of directors and is to be filed with the Commission pursuant to the Securities Exchange Act of 1934 within 120 days of the end of our fiscal year on December 31, 2025. Notwithstanding the foregoing, in accordance with the instructions to Item 407(e)(5) of Regulation S-K, the information contained in our proxy statement under the sub-heading “Compensation Committee Report” shall not be deemed to be filed as part of or incorporated by reference into this annual report on Form 10-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is hereby incorporated by reference from the information appearing under the captions “Stock Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our definitive proxy statement which involves the election of directors and is to be filed with the Commission pursuant to the Securities Exchange Act of 1934 within 120 days of the end of our fiscal year on December 31, 2025. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is hereby incorporated by reference from the information appearing under the captions “Corporate Governance” and “Transactions with Related Persons” in our definitive proxy statement which involves the election of directors and is to be filed with the Commission pursuant to the Securities Exchange Act of 1934 within 120 days of the end of our fiscal year on December 31, 2025. Item 14. Principal Accountant Fees and Services The information required by this Item as to the fees we pay our principal accountant is hereby incorporated by reference from the information appearing under the caption “Ratification and Approval of Independent Auditors” in our definitive proxy statement which involves the election of directors and is to be filed with the Commission pursuant to the Securities Exchange Act of 1934 within 120 days of the end of our fiscal year on December 31, 2025. 46 PART IV Item 15. Exhibit and Financial Statement Schedules (a) Documents filed as a part of this report: 1. Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) F-1 Consolidated Balance Sheets F-3 Consolidated Statements of Comprehensive Loss F-4 Consolidated Statements of Stockholders’ Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 2. Financial Statement Schedules All other financial statement schedules are omitted because they are not applicable or not required, or because the required information is included in the financial statements or notes thereto. 3. Exhibits Exhibit No. Description 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 — 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). 4.1 — Securities Purchase Agreement , dated June 17, 2007, with Invus, L.P. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 17, 2007 and incorporated by reference herein). 4.2 — Amendment , dated October 7, 2009, to Securities Purchase Agreement, dated June 17, 2007, with Invus, L.P. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 7, 2009 and incorporated by reference herein). 4.3 — Registration Rights Agreement , dated June 17, 2007, with Invus, L.P. (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K dated June 17, 2007 and incorporated by reference herein). 4.4 — Stockholders’ Agreement , dated June 17, 2007, with Invus, L.P. (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K dated June 17, 2007 and incorporated by reference herein). 4.5 — Supplement to Transaction Agreements , dated March 15, 2010, with Invus, L.P. and Invus C.V. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 15, 2010 and incorporated by reference herein). 4.6 — Supplement No. 2 to Transaction Agreements , dated February 23, 2012, with Invus, L.P. and Invus C.V. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 23, 2012 and incorporated by reference herein). 4.7 — Supplement No. 3 to Transaction Agreements , dated December 16, 2020, with Invus, L.P. and Invus C.V. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 16, 2020 and incorporated by reference herein). 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 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. 333-96469) and incorporated by reference herein). 47 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). 10.4 — 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 10.7 — 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). 10.9 — 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). †10.10 — 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). 10.13 — First Amendment , dated May 30, 2006, to Collaboration and License Agreement, dated December 17, 2003, with Bristol-Myers Squibb Company (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2015 and incorporated by reference herein). †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). 10.15 — 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). †10.16 — 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). †10.17 — First Amendment to Loan and Security Agreement , dated August 29, 2022, 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 August 29, 2022 and incorporated by reference herein). †10.18 — Second Amendment to Loan and Security Agreement , dated May 1, 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 May 1, 2023 and incorporated by reference herein). †10.19 — Third Amendment to Loan and Security Agreement , dated June 23, 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 June 23, 2023 and incorporated by reference herein). †10.20 — 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). †10.21 — 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). †10.22 — 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) †10.23 — 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). 48 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 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). *23.1 — Consent of Independent Registered Public Accounting Firm . *24.1 — Power of Attorney (contained in signature page). *31.1 — Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 . *31.2 — Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *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 (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. *101.SCH — XBRL Taxonomy Extension Schema Document. *101.CAL — XBRL Taxonomy Extension Calculation Linkbase Document. *101.DEF — XBRL Taxonomy Extension Definition Linkbase Document. *101.LAB — XBRL Taxonomy Extension Label Linkbase Document. *101.PRE — XBRL Taxonomy Extension Presentation Linkbase Document. ______________ * Filed herewith. † 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. Item 16. Form 10-K Summary Not applicable. 49 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Lexicon Pharmaceuticals, Inc. Date: March 5, 2026 By: /s/ MICHAEL S. EXTON Michael S. Exton, Ph.D. Chief Executive Officer Date: March 5, 2026 By: /s/ SCOTT M. COIANTE Scott M. Coiante 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 Michael S. Exton, Ph.D. and Scott M. 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/ MICHAEL S. EXTON Chief Executive Officer and Director (Principal Executive Officer) March 5, 2026 Michael S. Exton, Ph.D. /s/ SCOTT M. COIANTE Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) March 5, 2026 Scott M. Coiante /s/ RAYMOND DEBBANE Chairman of the Board of Directors March 5, 2026 Raymond Debbane /s/ PHILIPPE J. AMOUYAL Director March 5, 2026 Philippe J. Amouyal /s/ SAMUEL L. BARKER Director March 5, 2026 Samuel L. Barker, Ph.D. /s/ IVAN H. CHEUNG Director March 5, 2026 Ivan H. Cheung /s/ CHRISTOPHER J. SOBECKI Director March 5, 2026 Christopher J. Sobecki /s/ DIANE E. SULLIVAN Director March 5, 2026 Diane E. Sullivan /s/ JUDITH L. SWAIN Director March 5, 2026 Judith L. Swain, M.D. 50 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Lexicon Pharmaceuticals, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Lexicon Pharmaceuticals, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F-1 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. 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. 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 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. We evaluated estimated services incurred by third parties by understanding the terms and timeline of significant projects, evaluating management’s estimate of work performed and costs incurred by meeting with members of the Company’s clinical operations team, and obtaining external confirmation of key inputs to the clinical trial expense calculation, such as total approved trial budgets and amounts invoiced, and number and timing of patients enrolled in clinical studies. Further, we inspected invoices received from third parties during the year as well as after the balance sheet date and performed a lookback analysis to evaluate the completeness of accrued research and development expenses. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2002. Houston, Texas March 5, 2026 F-2 Lexicon Pharmaceuticals, Inc. Consolidated Balance Sheets (In thousands, except par value and share amounts) As of December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 34,326 $ 66,656 Short-term investments 61,904 171,301 Accounts receivable, net 2,384 3,473 Inventory 281 231 Prepaid expenses and other current assets 3,000 4,532 Total current assets 101,895 246,193 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 Total assets $ 184,987 $ 298,420 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 3,083 $ 14,801 Accrued liabilities 13,189 30,447 Current portion of long-term debt 4,595 — Total current liabilities 20,867 45,248 Long-term debt, net 49,408 100,298 Other long-term liabilities 7,174 6,924 Total liabilities 77,449 152,470 Commitments and contingencies (Note 10) Stockholders' Equity: Preferred stock, $ 0.01 par value; 5,000,000 shares authorized; 2,304,147 Series A Convertible Preferred shares issued and none outstanding — — Common stock, $ 0.001 par value; 450,000,000 shares authorized; 365,848,216 and 363,020,303 shares issued, respectively 366 363 Additional paid-in capital 2,129,912 2,117,325 Accumulated deficit ( 2,017,583 ) ( 1,967,242 ) Accumulated other comprehensive income 30 119 Treasury stock, at cost, 2,381,939 and 1,528,008 shares, respectively ( 5,187 ) ( 4,615 ) Total stockholders' equity 107,538 145,950 Total liabilities and stockholders’ equity $ 184,987 $ 298,420 The accompanying notes are an integral part of these consolidated financial statements. F-3 Lexicon Pharmaceuticals, Inc. Consolidated Statements of Comprehensive Loss (In thousands, except per share amounts) Year Ended December 31, 2025 2024 2023 Revenues: Net product revenue $ 4,647 $ 6,001 $ 1,110 Licensing revenue 45,000 25,000 — Royalties and other revenue 156 80 94 Total revenues 49,803 31,081 1,204 Operating expenses: Cost of sales 274 616 85 Research and development, including stock-based compensation of $ 6,289 , $ 5,839 and $ 5,139 respectively 61,121 84,480 58,887 Selling, general and administrative, including stock-based compensation of $ 6,228 , $ 7,660 and $ 9,201 , respectively 37,319 143,102 113,982 Total operating expenses 98,714 228,198 172,954 Loss from operations ( 48,911 ) ( 197,117 ) ( 171,750 ) Interest and other expense ( 8,339 ) ( 15,579 ) ( 13,101 ) Interest income and other 6,909 12,293 7,732 Net loss $ ( 50,341 ) $ ( 200,403 ) $ ( 177,119 ) Net loss per common share, basic and diluted $ ( 0.14 ) $ ( 0.63 ) $ ( 0.80 ) Weighted average common shares outstanding, basic and diluted 363,053 320,031 221,130 Other comprehensive loss: Unrealized (loss) gain on investments ( 89 ) 88 459 Comprehensive loss $ ( 50,430 ) $ ( 200,315 ) $ ( 176,660 ) The accompanying notes are an integral part of these consolidated financial statements. F-4 Lexicon Pharmaceuticals, Inc. Consolidated Statements of Stockholders’ Equity (In thousands) Accumulated Additional Other 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, 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 Issuance of common stock, net of fees 55,288 55 — — 138,768 — — — 138,823 Issuance of common stock under Equity Incentive Plans 1,291 1 — — ( 1 ) — — — — Payments for tax withholding on share-based compensation vesting — — — — — — — ( 824 ) ( 824 ) Net loss — — — — — ( 177,119 ) — — ( 177,119 ) Unrealized gain on investments — — — — — — 459 — 459 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 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 ) — — — — 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 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. F-5 Lexicon Pharmaceuticals, Inc. Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 50,341 ) $ ( 200,403 ) $ ( 177,119 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 621 534 554 Stock-based compensation 12,517 13,499 14,340 Amortization of debt-related costs 1,700 1,845 1,774 Accretion of marketable securities purchased at a discount ( 3,712 ) ( 9,305 ) ( 5,617 ) Other non-cash adjustments ( 1,742 ) 812 1,512 Changes in operating assets and liabilities: 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 (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 ) Cash flows from investing activities: Purchases of property and equipment — ( 1,031 ) ( 470 ) Purchases of investments ( 139,838 ) ( 328,747 ) ( 223,343 ) Maturities of investments 252,858 314,400 173,870 Net cash provided by (used in) investing activities 113,020 ( 15,378 ) ( 49,943 ) Cash flows from financing activities: Proceeds from issuance of common stock, net of fees — — 138,823 Proceeds from issuance of common stock for equity incentive plans 73 64 — Proceeds from issuance of preferred stock, net of fees — 241,322 — 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 (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: Cash paid for interest $ 8,330 $ 12,919 $ 10,057 Supplemental disclosure of noncash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations $ 3,243 $ — $ — Issuance of equity-classified warrants $ — $ — $ 307 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. F-6 Lexicon Pharmaceuticals, Inc. Notes to Consolidated Financial Statements 1. Organization and Operations Lexicon Pharmaceuticals, Inc. (“Lexicon” or the “Company”) is a Delaware corporation incorporated on July 7, 1995. 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. 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; the amount and timing of research, development and commercialization expenditures; the resources devoted to developing and supporting its products; general and industry-specific economic conditions which may affect research, development and commercialization expenditures; and its ability to obtain and enforce patents and other proprietary rights in its discoveries, comply with federal and state regulations, and maintain sufficient capital to fund its activities. As a result of the aforementioned factors and the related uncertainties, there can be no assurance of the Company’s future success. 2. Summary of Significant Accounting Policies Basis of Presentation. The accompanying consolidated financial statements include the accounts of Lexicon and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Use of Estimates. The preparation of financial statements in conformity with U. S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. 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, Restricted Cash and Short-Term Investments. Lexicon considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. As of December 31, 2025 and 2024, short-term investments consist primarily of U.S. treasury bills as well as certain corporate and other debt securities. The Company’s short-term investments are available for use in current operations regardless of the stated maturity date of the security. These short-term investments are classified as available-for-sale securities as the Company has not historically or does not intend to sell any of its available-for-sale securities prior to their maturity dates. Short-term investments are carried at fair value, based on quoted market prices of the securities. The costs of securities sold is based on the specific identification method. Any net realized gains and losses, interest and dividends, and amortization of premium or accretion of discount are included in interest and other income. Unrealized gains and losses on such securities are reported as a separate component of stockholders’ equity. The Company reviews its portfolio of available-for-sale debt securities in an unrealized loss position. For those investments whose fair value is less than amortized cost, to the extent the Company decided to sell these investments prior to their maturity dates or was required to sell such investments, the Company would evaluate the expected cash flows to be received as compared to amortized cost and to determine if an expected credit loss has occurred. Accounts Receivable. Lexicon records trade accounts receivable in the normal course of business related to the sale of products or services, net of an allowance for expected credit losses. F-7 Concentration of Credit Risk. Lexicon’s cash equivalents, investments and accounts receivable represent potential concentrations of credit risk. The Company attempts to minimize potential concentrations of risk in cash equivalents and investments by placing investments in high-quality financial instruments. 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 has not experienced any significant credit losses to date. Property and Equipment. Property and equipment that is held and used is carried at cost and depreciated using the straight-line method over the estimated useful life of the assets, which ranges from three to 40 years. Maintenance, repairs and minor replacements are charged to expense as incurred. Leasehold improvements are amortized over the shorter of the estimated useful life or the remaining lease term. Significant renewals and betterments are capitalized. Impairment of Long-Lived Assets. Long-lived assets and right-of-use assets for leases are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount that the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no impairments of long-lived assets, in 2025, 2024, or 2023. Goodwill. 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. 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. There was no impairment of goodwill in 2025, 2024 or 2023. Leases. Lexicon determines if a contract is or contains a lease at inception or upon modification of the contract. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. Lexicon does not apply this accounting to those leases with terms of twelve (12) months or less. Operating lease right-of-use assets and associated lease liabilities are recorded in the balance sheet at the lease commencement date based on the present value of future lease payments to be made over the expected lease term. 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: 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. 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 agreements: (a) identify the contract(s) with a customer; (b) identify the performance obligations in the contract; (c) determine the transaction price; (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. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company develops assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. Product Revenues F-8 Product revenues consist of U.S. sales of INPEFA, which Lexicon began shipping to its customers in the U.S. in June 2023. These customers primarily include wholesalers and limited retail pharmacies. The Company is continuing to contract with certain managed care programs or pharmacy benefit managers (“PBMs”) and has legislatively mandated contracts with the federal and state governments under which rebates are provided based on product utilization . Product revenues are recognized when control is transferred to the customer upon delivery. The Company recognizes product revenue net of applicable estimates of reserves for variable consideration using the expected value method. These estimates consider relevant factors such as current contractual and statutory requirements, industry data and forecasted customer buying and payment patterns. Net product revenue includes variable consideration only to the extent that it is probable that a significant reversal in revenue recognized will not occur in a future period. As necessary, these estimates will be adjusted in the period that such variances to actuals become known. Listed below is a further discussion of these reserves and sales return allowances: Customer Credits. 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. Rebates. Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program reflecting amounts owed after final dispensing of the product to participants. The Company’s estimates for rebates is based on statutory discount rates, third party market research data and data from sales to its customers. As rebates are generally invoiced and paid in arrears, the Company accrues an estimate of rebates based on the current quarter’s activity, plus any known unpaid prior quarter rebates. Chargebacks. Chargebacks are discounts that occur when contracted healthcare providers purchase directly from a wholesaler. Generally, the contracted healthcare providers purchase INPEFA at a discounted price. The wholesaler, in turn, charges back to Lexicon the difference between the price paid by the wholesaler and the discounted price that the wholesaler’s customer pays for that product. Medicare Part D Coverage Gap. The Medicare Part D prescription drug benefit mandates manufacturers to fund a portion of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. The Company’s estimates for the expected Medicare Part D coverage gap are based on sales data received from a third party and projections based on historical data. As funding of the coverage gap is generally invoiced and paid in arrears, the Company accrues an estimate based on the current quarter’s activity, plus any known unpaid prior quarter estimates. Co-payment assistance. Patients with commercial insurance who meet certain eligibility requirements are eligible to receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. 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 and the customers’ return rights. 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. If it is probable that a significant revenue reversal will not occur, the associated development milestone value is included in the transaction price. Development milestones that are not within the control of the Company or the licensee, including those requiring regulatory approval, are not considered probable of being achieved until those approvals are received. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue when (or as) the performance obligation is satisfied. 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 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 F-9 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 revenue has been recognized and the Company’s right to consideration is unconditional. Cost of Sales. Cost of sales consists of third-party manufacturing costs, product shipping and handling costs and freight associated with sales of INPEFA. The Company began capitalizing inventory manufactured subsequent to regulatory approval of INPEFA in June 2023, as the related costs were expected to be recovered through the commercialization of the product. Costs related to manufacturing inventory prior to the approval of INPEFA have been recorded as research and development expense in the consolidated statements of comprehensive loss. Research and Development Expenses. 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. Technology license fees for technologies that are utilized in research and development and have no alternative future use are expensed when incurred. Substantial portions of the Company’s preclinical and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors. 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 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. The Company’s estimates depend on the timeliness and accuracy of the data provided by the vendors regarding the status of each program and total program spending. The Company periodically evaluates the estimates to determine if adjustments are necessary or appropriate based on information it receives. Stock-Based Compensation. Compensation expense related to stock options and restricted stock units (“RSUs”) is determined based on the fair value of the award on the date of the grant and is recognized on a straight-line basis over the vesting period in which an employee is required to provide service. Forfeitures of share-based payment awards are recognized in the period in which they occur. Compensation expense is recorded in research and development expense and selling, general, and administrative expense as noted on the Company’s consolidated statements of comprehensive loss. Income Taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized differently in the financial statements and tax returns. The Company uses the liability method in accounting for income taxes. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of liabilities and assets using enacted tax rates and laws in effect in the years in which the differences are expected to reverse. 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 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 when the company has a net loss because they are antidilutive. F-10 3. 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 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) 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: U.S. treasury securities 39,004 22 — 39,026 Corporate debt securities 22,871 8 ( 1 ) 22,878 Total short-term investments $ 61,875 $ 30 $ ( 1 ) $ 61,904 Total cash and cash equivalents, restricted cash and short-term investments $ 125,201 $ 30 $ ( 1 ) $ 125,230 As of December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) 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: U.S. treasury securities 127,884 106 — 127,990 Corporate debt securities 43,299 30 ( 18 ) 43,311 Total short-term investments $ 171,183 $ 136 $ ( 18 ) $ 171,301 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. There were no realized gains or losses for the years ended December 31, 2025, 2024, and 2023. 4. Fair Value Measurements The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. The following levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities: • Level 1 – quoted prices in active markets for identical assets, which include U.S. treasury securities • Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.), which include corporate debt securities • Level 3 – significant unobservable inputs 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 F-11 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. Assets at Fair Value As of December 31, 2025 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 34,326 $ — $ — $ 34,326 Short-term investments 39,026 22,878 — 61,904 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 As of December 31, 2024 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 66,656 $ — $ — $ 66,656 Short-term investments 127,990 43,311 — 171,301 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. 5. Supplemental Financial Information Accrued Liabilities. As of December 31, 2025 2024 (in thousands) Accrued research and development services $ 2,932 $ 12,251 Accrued compensation and benefits 6,415 14,712 Short-term lease liability 1,642 1,175 Other 2,200 2,309 Accrued liabilities $ 13,189 $ 30,447 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. F-12 6. Property and Equipment Property and equipment at December 31, 2025 and 2024 are as follows: Estimated Useful Lives As of December 31, In Years 2025 2024 (in thousands) Computers and software 3 - 5 $ 2,003 $ 2,003 Furniture and fixtures 5 - 7 389 389 Leasehold improvements 3 - 7 2,178 2,178 Total property and equipment 4,570 4,570 Less: Accumulated depreciation and amortization ( 2,707 ) ( 2,086 ) Net property and equipment $ 1,863 $ 2,484 7. Collaboration and Licensing Arrangement 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. F-13 Viatris . 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 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 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. 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 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. 8. Income Taxes Effective Tax Rate Reconciliation. A reconciliation of the statutory tax rate to the effective tax rate for the years ended December 31, 2025, 2024 and 2023 consists of the following: Year Ended December 31, 2025 Amount Percent (in thousands) U.S. Federal Statutory Tax Rate $ ( 10,572 ) 21.00 % Nontaxable or Nondeductible Items Incentive Stock Options 2,449 ( 4.86 ) % Tax Credits Research and Development Credit ( 944 ) 1.87 % Changes in Valuation Allowances 8,872 ( 17.62 ) % Other 195 ( 0.39 ) % Total $ — — % F-14 Year Ended December 31, 2024 2023 (in thousands) Expected income tax expense (benefit) at 21% $( 42,085 ) $( 37,196 ) State income taxes, net of federal benefit 319 ( 3,895 ) Equity compensation 3,758 1,530 Research and development credit ( 4,241 ) ( 712 ) 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 Other 454 586 Income tax benefit $ — $ — Deferred Tax Assets and Liabilities. Lexicon recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized differently in the financial statements and tax returns. The components of Lexicon’s deferred tax assets (liabilities) at December 31, 2025 and 2024 are as follows: As of December 31, 2025 2024 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 326,625 $ 316,034 Research and development tax credits 35,186 34,243 Orphan drug credits 24,524 24,524 Capitalized research and development 37,408 38,688 Stock-based compensation 4,093 4,327 Interest 2,076 1,748 Other 2,904 2,726 Total deferred tax assets 432,816 422,290 Deferred tax liabilities: Other ( 1,777 ) ( 1,357 ) Total deferred tax liabilities ( 1,777 ) ( 1,357 ) Less: valuation allowance ( 431,039 ) ( 420,933 ) Net deferred tax liabilities $ — $ — Net Operating Losses/Valuation Allowance. At December 31, 2025, Lexicon had both federal and state NOL carryforwards of approximately $ 1.5 billion and $ 171.6 million, respectively. The Company had $ 940.1 million of U.S. federal NOL carryforwards as of December 31, 2025, which can be carried forward indefinitely. The remaining federal and state NOL carryforwards will begin to expire in 2027. The Company maintains a valuation allowance on net operating losses and other deferred tax assets. Accordingly, the Company has not reported any tax benefit relating to the remaining net operating loss carryforwards and income tax credit carryforwards that are available for utilization in future periods. On a periodic basis, the valuation allowance is reassessed on deferred income tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets. In 2025, the Company reassessed the valuation allowance and considered negative evidence, including the cumulative losses over the three years ended December 31, 2025 and positive evidence including the projections of future income. 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 F-15 of the valuation allowance associated with U.S. deferred tax assets in future periods. However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time of the assessment. 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 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. Other. 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. Any interest and penalties related to uncertain tax positions will be reflected as a component of income tax expense. The Company is subject to U.S. federal and state income taxes. The tax years 2021 through 2024 remain open to examination by the Internal Revenue Service of the United Sates and the tax years 2020 through 2024 remain open to examination by various state tax authorities. 9. Debt Obligations Oxford Term Loans Overview. 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, F-16 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 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. 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 Company was in compliance with its debt covenants as of December 31, 2025. 10. Commitments and Contingencies Operating Lease Obligations. 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, 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. The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at December 31, 2025: F-17 (in thousands) 2026 $ 1,649 2027 1,683 2028 1,718 2029 1,753 2030 1,863 Thereafter 2,979 Total undiscounted operating lease liability $ 11,645 Less: amount of lease payments representing interest ( 3,411 ) Present value of future lease payments 8,234 Less: short-term operating lease liability ( 1,642 ) Long-term operating lease liability $ 6,592 Legal Proceedings. Lexicon is from time to time party to claims and legal proceedings that arise in the normal course of its business and that it believes will not have, individually or in the aggregate, a material adverse effect on its results of operations, financial condition or liquidity. 11. Equity Incentive Awards The Company has stockholder-approved equity incentive plans further described below that permit the grant of stock options, restricted stock unit awards, and other stock-based awards to employees, directors, and consultants of the Company. 2017 Equity Incentive Plan. The Company’s 2017 Equity Incentive Plan permits the grant of incentive stock options to employees and nonstatutory stock options to employees, directors and consultants of the Company. The plan also permits the grant of stock bonus awards, restricted stock awards, restricted stock unit awards, stock appreciation rights and performance stock awards. Incentive and nonstatutory stock options have an exercise price of 100 % or more of the fair market value of the Company’s common stock on the date of grant. Most stock options granted under the 2017 Equity Incentive Plan become vested and exercisable over a period of four years . Stock options granted under the Equity Incentive Plan have a term of 10 years from the date of grant. Vesting of restricted stock units issued under this plan generally vest in three annual installments. 2017 Non-Employee Directors’ Equity Incentive Plan (the “Directors’ Plan”). Under the Company’s Directors’ Plan, non-employee directors may be granted awards under the plan with an aggregate grant date fair value of no more than $ 500,000 during any calendar year, taken together with any cash fees paid to such non-employee director in compensation for service on Lexicon’s board of directors during such calendar year. Stock options granted under the Directors’ Plan have an exercise price equal to the fair market value of the Company’s common stock on the date of grant and a term of 10 years from the date of grant. Vesting of restricted stock units granted under this plan occurs on the first anniversary of the grant date. The total number of shares of common stock that may be issued pursuant to stock awards under the Equity Incentive Plan and the Directors’ Plan shall not exceed in the aggregate 75,000,000 and 4,000,000 shares at December 31, 2025, respectively. Under the combined plans, as of December 31, 2025, an aggregate of 36,206,865 shares of common stock were reserved for issuance upon exercise of outstanding stock options and vesting of outstanding restricted stock units and 28,711,561 additional shares were available for future grants. 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, 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. As of December 31, 2025, future stock-based compensation cost for all outstanding unvested stock options and restricted stock units was $ 17.3 million, which is expected to be recognized over a weighted-average period of 1.1 years. F-18 Stock Options. 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 Exercised ( 67 ) 1.08 Expired ( 310 ) 6.41 Forfeited ( 4,868 ) 2.84 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, 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. For purposes of determining the fair value of stock options, the Company segregates its options into two homogeneous groups, based on exercise and post-vesting employment termination behaviors, resulting in different assumptions used for expected option lives. Historical data is used to estimate the expected option life for each group. Expected volatility is based on the historical volatility in the Company’s stock price. The following weighted-average assumptions were used for stock options granted in the years ended December 31, 2025, 2024 and 2023, respectively: Expected Volatility Risk-free Interest Rate Expected Term Dividend Rate December 31, 2025: Employees 105 % 3.9 % 4 0 % Officers and non-employee directors 115 % 4.3 % 6 0 % December 31, 2024: Employees 96 % 4.4 % 4 0 % Officers and non-employee directors 104 % 4.2 % 6 0 % December 31, 2023: Employees 110 % 3.9 % 4 0 % Officers and non-employee directors 98 % 4 % 6 0 % Restricted Stock Units. During the years ended December 31, 2025, 2024 and 2023, Lexicon granted its employees restricted stock units in lieu of or in addition to annual stock option awards. The total fair value of shares vested in 2025, 2024 and 2023 was $ 1.9 million, $ 5.1 million and $ 2.9 million, respectively. During the years ended December 31, 2025, 2024 and 2023, Lexicon granted its non-employee directors 625,184 , 257,670 and 64,256 restricted stock units, respectively. 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: F-19 Shares Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2024 6,300 $ 2.27 Granted 14,323 0.69 Vested ( 2,761 ) 2.35 Forfeited ( 2,393 ) 1.18 Outstanding at December 31, 2025 15,469 $ 0.96 12. Benefit Plan Lexicon maintains a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. The plan covers substantially all full-time employees. Participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. The Company matches employee contributions according to a specified formula. The matching contributions totaled $ 0.8 million, $ 2.3 million and $ 1.2 million in the years ended December 31, 2025, 2024 and 2023, respectively. 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. 13. Other Capital Agreements 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. 14. 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. 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 product. F-20 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, 2025 2024 2023 (in thousands) Revenues: Net product revenue $ 4,647 $ 6,001 $ 1,110 Licensing revenue 45,000 25,000 — Royalties and other revenue 156 80 94 Total revenues 49,803 31,081 1,204 Operating expenses: Cost of sales 274 616 85 Research and development 54,586 77,549 53,748 Sales and marketing 6,143 97,265 77,561 General and administrative 25,232 26,991 25,786 Other segment expense (1) (2) 12,479 25,777 15,774 Total operating expenses 98,714 228,198 172,954 Loss from operations ( 48,911 ) ( 197,117 ) ( 171,750 ) Interest and other expense ( 8,339 ) ( 15,579 ) ( 13,101 ) Interest income and other, net 6,909 12,293 7,732 Net loss $ ( 50,341 ) $ ( 200,403 ) $ ( 177,119 ) (1) For the years ended December 31, 2025, 2024 and 2023, other segment expense includes stock compensation of $ 6.3 million, $ 5.8 million and $ 5.1 million related to research and development personnel, respectively; $ 0.04 million, $ 2.0 million and $ 2.3 million related to sales and marketing personnel, respectively; and $ 6.2 million, $ 5.7 million and $ 6.9 million related to general and administrative personnel. (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. 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 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. F-21