What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2025-11-06 · 104 added, 140 removed, 265 unchanged (48% of the section changed)

3 unchanged sentences

(In thousands, except par value and share amounts)

As of September 30, As of December 31,

As of March 31, As of December 31,

Assets (unaudited)

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Accrued liabilities 6,902 13,189

Deferred revenue 4,303 —

Current portion of long-term debt — 4,595

Total current liabilities 9,898 20,867

4 unchanged sentences

Stockholders’ Equity:

Preferred stock, $ 0.01 par value;

Convertible preferred stock, $ 0.01 par value;

5,000,000 shares authorized

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

2,712,582 and 2,304,147 shares issued at March 31, 2026 and December 31, 2025, respectively;

408,435 outstanding at March 31, 2026 and none outstanding at December 31, 2025

Common stock, $ 0.001 par value;

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Lexicon Pharmaceuticals, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive Loss

(In thousands, except per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net product revenue $ 1,090 $ 1,262

Licensing revenue 13,154 — 40,698 —

Licensing and milestone revenue 20,000 —

Royalties and other revenue 12 —

4 unchanged sentences

12,756 15,303

Selling, general and administrative, including stock-based compensation of $ 1,612 , $ 1,341 , $ 4,656 and $ 7,229 respectively

7,602 39,592 28,562 110,844

Selling, general and administrative, including stock-based compensation of $ 1,709 and $ 1,469

Total operating expenses 22,098 26,941

6 unchanged sentences

Weighted average common shares outstanding, basic and diluted 400,240 362,073

Other comprehensive income (loss):

Unrealized gain (loss) on investments 43 542 ( 90 ) 318

Other comprehensive loss:

Unrealized loss on investments ( 160 ) ( 94 )

Comprehensive loss $ ( 1,203 ) $ ( 25,389 )

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

Stock-based compensation — — — — 4,302 — — — 4,302

Issuance of preferred stock, net of fees — — 2,304 23 241,552 — — — 241,575

Stock-based compensation expense — — — — 3,043 — — — 3,043

Issuance of common stock under Equity Incentive Plans 2,540 3 — — ( 3 ) — — — —

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Balance at March 31, 2025 365,560 $ 366 — $ — $ 2,120,365 $ ( 1,992,537 ) $ 25 $ ( 5,187 ) $ 123,032

Stock-based compensation — — — — 4,859 — — — 4,859

Fees related to preferred stock — — — — ( 175 ) — — — ( 175 )

Issuance of common stock under Equity Incentive Plans 48 — — — 1 — — — 1

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

Net loss — — — — — ( 53,429 ) — — ( 53,429 )

Unrealized loss on investments — — — — — — ( 143 ) — ( 143 )

Balance at June 30, 2024 363,020 $ 363 — $ — $ 2,113,090 $ ( 1,868,665 ) $ ( 193 ) $ ( 4,615 ) $ 239,980

Stock-based compensation — — — — 2,801 — — — 2,801

Net loss — — — — — ( 64,811 ) — — ( 64,811 )

Unrealized gain on investments — — — — — — 542 — 542

Balance at September 30, 2024 363,020 $ 363 — $ — $ 2,115,891 $ ( 1,933,476 ) $ 349 $ ( 4,615 ) $ 178,512

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

Lexicon Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

Common Stock Preferred Stock Additional Accumulated Other

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

Stock-based compensation — — — — 3,043 — — — 3,043

Stock-based compensation expense — — — — 3,078 — — — 3,078

Issuance of preferred stock, net of fees — — 408 4 26,544 — — — 26,548

Issuance of common stock, net of fees 56,489 57 — — 69,616 — — — 69,673

Issuance of common stock under Equity Incentive Plans 3,371 3 — — 62 — — — 65

Issuance of treasury stock under Equity Incentive Plans — — — — ( 5,187 ) — — 5,187 —

Payments for tax withholding on share-based compensation vesting — — — — — — — ( 2,843 ) ( 2,843 )

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Balance at March 31, 2026 425,708 $ 426 408 $ 4 $ 2,224,025 $ ( 2,018,626 ) $ ( 130 ) $ ( 2,843 ) $ 202,856

Stock-based compensation — — — — 3,195 — — — 3,195

Issuance of common stock under Equity Incentive Plans 221 — — — — — — — —

Net income — — — — — 3,252 — — 3,252

Unrealized loss on investments — — — — — — ( 39 ) — ( 39 )

Balance at June 30, 2025 365,781 $ 366 — $ — $ 2,123,560 $ ( 1,989,285 ) $ ( 14 ) $ ( 5,187 ) $ 129,440

Stock-based compensation — — — — 3,445 — — — 3,445

Net loss — — — — — ( 12,769 ) — — ( 12,769 )

Unrealized gain on investments — — — — — — 43 — 43

Balance at September 30, 2025 365,781 $ 366 — $ — $ 2,127,005 $ ( 2,002,054 ) $ 29 $ ( 5,187 ) $ 120,159

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

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(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

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Stock-based compensation 3,078 3,043

Amortization/accretion of debt-related costs 1,205 1,444

Amortization of debt-related costs 681 401

Accretion of marketable securities purchased at a discount ( 562 ) ( 1,326 )

1 unchanged sentence

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable 1,139 ( 1,885 )

Decrease (increase) in inventories 73 ( 255 )

Decrease (increase) in prepaid expenses and other current assets 448 ( 1,576 )

(Increase) decrease in accounts receivable, net ( 9,395 ) 1,026

Decrease in inventories 5 30

(Increase) decrease in prepaid expenses and other current assets ( 319 ) 1,213

Decrease in other long-term assets 195 186

Decrease (increase) in accounts payable and other liabilities ( 24,573 ) 5,673

Decrease in accounts payable and other liabilities ( 6,899 ) ( 21,692 )

Net cash used in operating activities ( 14,730 ) ( 43,778 )

Cash flows from investing activities:

Purchases of property and equipment — ( 557 )

Purchases of investments ( 105,960 ) ( 64,971 )

Maturities of investments 35,697 105,553

Net cash provided by (used in) investing activities 108,190 ( 69,078 )

Net cash (used in) provided by investing activities ( 70,263 ) 40,582

Cash flows from financing activities:

Proceeds from issuance of common stock for equity incentive plans — 89

Proceeds from issuance of common stock, net of fees 69,986 —

Proceeds from issuance of preferred stock, net of fees 26,548 —

Proceeds from issuance of common stock for equity incentive plans 65 —

Payments for tax withholding on share-based compensation vesting ( 2,843 ) ( 572 )

Repayment of debt borrowings ( 5,000 ) —

Other debt financing fees — ( 1,306 )

Net cash (used in) provided by financing activities ( 45,572 ) 238,453

Net (decrease) increase in cash, cash equivalents and restricted cash 12,000 12,086

Net cash provided by (used in) financing activities 88,756 ( 572 )

Net increase (decrease) in cash, cash equivalents and restricted cash 3,763 ( 3,768 )

Cash, cash equivalents, and restricted cash at beginning of period 63,326 66,656

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Supplemental disclosure of non-cash investing and financing activities:

Conversion of preferred stock to common stock — 115

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

Accrued financing costs $ 313 $ —

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

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Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

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

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

Operating results for the three and nine month periods ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ended December 31, 2025.

Operating results for the three month period ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ended December 31, 2026.

For further information, refer to the financial statements and footnotes thereto included in Lexicon’s annual report on Form 10-K for the year ended December 31, 2025, as filed with the SEC.

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Recent Accounting Pronouncements Issued But Not Yet Adopted .

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

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

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disclosures (Subtopic 220-40) – Disaggregation of Income Statement Expenses , which is effective prospectively for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027.

The Company is evaluating the impact of adopting ASU 2024-03.

Cash and Cash Equivalents, Restricted Cash and Investments

The fair value of cash and cash equivalents, restricted cash and investments held are as follows:

As of September 30, 2025

As of March 31, 2026

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

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

As of September 30, 2025 and December 31, 2024, Lexicon’s investments in an unrealized loss position had an estimated fair value of $ 16.3 million and $ 12.9 million, respectively.

There were no realized gains or losses during either of the nine month periods ended September 30, 2025 and 2024.

As of March 31, 2026 and December 31, 2025, Lexicon’s investments in an unrealized loss position had an estimated fair value of $ 123.1 million and $ 2.5 million, respectively.

During the three month period ended March 31, 2026, there were less than $ 0.1 million in realized gains and no realized losses.

There were no realized gains or losses during the three month period ended March 31, 2025.

Fair Value Measurements

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

Assets at Fair Value as of September 30, 2025

Assets at Fair Value as of March 31, 2026

Level 1 Level 2 Level 3 Total

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Property and Equipment.

Estimated Useful Lives As of September 30, As of December 31,

Estimated Useful Lives As of March 31, As of December 31,

In Years 2026 2025

8 unchanged sentences

Accrued Liabilities.

As of September 30, As of December 31,

As of March 31, As of December 31,

(in thousands)

4 unchanged sentences

Total accrued liabilities $ 6,902 $ 13,189

As of December 31, 2024, $ 8.5 million of accrued severance is included in accrued compensation and benefits within accrued liabilities on the condensed consolidated balance sheet, all of which was paid prior to September 30, 2025.

Net Income (Loss) Per Share.

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

Potentially dilutive shares associated with warrants, stock options and restricted stock units totaling 5.5 million and 2.4 million for the three and nine months ended September 30, 2025, and totaling 0.3 million and 0.5 million for the three and nine months ended September 30, 2024, were not included in the computation of diluted earnings per share because they are antidilutive due to the Company’s net loss in all periods presented.

Potentially dilutive shares associated with warrants, stock options and restricted stock units totaling 8.7 million and 0.3 million for the three months ended March 31, 2026 and 2025, respectively, and our convertible preferred shares further described in Note 9 were not included in the computation of diluted earnings per share because they are antidilutive due to the Company’s net loss in all periods presented.

Collaborations and Strategic Alliances

Novo Nordisk .

In March 2025, the Company entered into an exclusive license agreement (the “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 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.

In April 2025, the Company received an upfront payment of $ 45 million under the License Agreement and is eligible to receive (a) up to an aggregate of $ 485 million upon the achievement of specified regulatory and commercial launch milestones and (b) up to an aggregate of $ 475 million upon the achievement of specified sales milestones.

In March 2025, the Company entered into an exclusive 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 agreement, the Company received an upfront payment of $ 45 million in April 2025, achieved the first two development milestones of $ 10 million each during the three months ended March 2026 and is eligible to receive (a) up to an aggregate of $ 465 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 License Agreement, the Company is also required to use commercially reasonable efforts to complete agreed-upon IND-enabling activities for LX9851 pursuant to an approved research plan as well as 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.

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

During the three months and nine months ended September 30, 2025, the Company recognized $ 13.2 million and $ 40.7 million as licensing revenue on the condensed consolidated statements of comprehensive income (loss) based on partial completion of the IND-enabling activities.

The remaining $ 4.3 million of the $ 45 million upfront payment is recorded as deferred revenue on the condensed consolidated balance sheet.

The Company will recognize the remaining amount as revenue using the input method over the remaining period the IND-enabling activities are performed.

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 Novo Nordisk will be recognized when the related sales occur.

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

In October 2024, the Company entered into an exclusive license agreement with Viatris Inc.

for the development and commercialization of sotagliflozin in all markets outside of the United States and Europe pursuant to which the Company received an upfront payment of $ 25 million.

(“Viatris”) for the development and commercialization of sotagliflozin in all markets outside of the United States and Europe (the “Licensed Territory”) pursuant to which the Company received an upfront payment of $ 25 million.

Lexicon also entered into a manufacturing and supply agreement with Viatris pursuant to which Lexicon supplies the development and commercial requirements of sotagliflozin of Viatris, and Viatris pays an agreed upon transfer price for such supply.

Lexicon is also eligible to receive (a) up to an aggregate of $ 12 million upon the achievement of specified regulatory milestones, (b) up to an aggregate of $ 185 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.

For additional information, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

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 Loans”).

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

The first two $ 25 million tranches totaling $ 50 million were funded in 2022 and the third $ 50 million tranche was funded in 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 the expiration of the interest-only period with a current amortization date of May 1, 2027.

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, which occurred in April 2025, 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 ® (sotagliflozin), as well as certain other terms.

Interest, Principal Payments, and Carrying Value of Debt.

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

Hercules Term Loans .

On May 4, 2026, the Company and its subsidiaries entered into a loan and security agreement with Hercules Capital, Inc.

and certain of its affiliates (“Hercules”) that provides up to $ 100 million in borrowing capacity (the “Hercules Term Loans”) available in three tranches, each maturing in May 2030.

Monthly interest-only payments are due during an initial 18 -month period, which may be extended to 24 months or 30 months if specified performance milestones are achieved.

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

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 tranche.

As of September 30, 2025, the weighted average interest rate of the Oxford Term Loans was 11.8 %.

In April 2025, the Company repaid $ 45 million (including pro-rata final payment exit fees) to Oxford on a pro-rata basis across each loan tranche pursuant to the terms of the Seventh Amendment.

Additional payments of $ 20.2 million, $ 30.2 million, and $ 11.6 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, 2027, December 31, 2028 and December 31, 2029, respectively, with respect to all borrowed loan tranches.

As a result of the Seventh Amendment, the current amortization date of May 1, 2027 and the final maturity date of March 1, 2029 are subject to potential acceleration to December 1, 2026 and November 1, 2027, respectively, dependent upon the occurrence of certain future events.

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

As of September 30, 2025, the Company reflected the carrying value of the Oxford Term Loans of $ 56.5 million in long-term debt on the condensed consolidated balance sheet.

The carrying value above reflects an unamortized discount of $ 5.5 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.

Oxford Warrants.

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

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

For additional information on these warrants refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Restrictive Provisions/Covenants.

Among other restrictive provisions and covenants, the loan and security agreement includes a financial covenant which requires us 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) fifty percent ( 50 %) of the outstanding principal amount of the

Oxford Term Loans and (b) the required minimum amount of $ 29 million.

As of September 30, 2025, the Company reflected the $ 29 million minimum cash in the blocked account as restricted cash on the condensed 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 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 September 30, 2025.

The first $ 55 million tranche was funded at closing.

The second $ 20 million tranche is available for draw at the Company’s option by no later than June 15, 2028, subject to the achievement of specified performance milestones and certain additional timing restrictions.

The third $ 25 million tranche is available for draw at the Company’s option, subject to Hercules’s consent, at any time prior to the expiration of the interest-only payment period.

The Hercules Term Loans bear interest at a floating rate equal to the prime rate plus 3.10 %, but not less than 9.85 %.

The Company may prepay the Hercules Term Loans in whole or in part at its option at any time.

Any prepayment of the Hercules Term Loans is subject to prepayment fees equal to 3.0 % of the outstanding principal being repaid, subject to a

declining scale depending on when prepayment occurs relative to the applicable closing date.

A final payment equal to 6.25 % of the amount funded under the Hercules Term Loans is due upon prepayment or maturity.

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

Financial covenants include (a) a minimum cash covenant beginning on June 1, 2027, which will be extended to January 1, 2028 upon achievement of specified performance milestones and waived at any time the Company meets specified market capitalization requirements and (b) a minimum revenue covenant relating to net sales of its products beginning only at specified times after the Company draws the second or third tranche, which will be waived at any time the Company meets specified minimum cash and/or market capitalization requirements.

In connection with the loan and security agreement, the Company agreed to grant Hercules warrants to purchase a number of shares of its common stock equal to 2 % of the aggregate principal amount of the Hercules Term Loans made and funded under the loan and security agreement at an exercise price of $ 1.59 per share.

Concurrent with the funding of the first tranche, the Company granted Hercules warrants to purchase 691,823 shares of its common stock.

Upon funding of the second and third tranches, the Company will grant Hercules warrants to purchase an additional 251,572 and 314,465 shares of its common stock, respectively.

The warrants are exercisable for a five-year period from the date of issuance and feature a net cashless exercise provision.

Oxford Term Loans.

Concurrent with its execution of the loan and security agreement with Hercules, the Company repaid all amounts due under its loan and security agreement with Oxford Finance LLC and the lenders listed therein (“Oxford”), under which $ 100 million had been funded from inception through March 31, 2026 (the “Oxford Term Loans”).

In April 2025, the Company repaid $ 45 million to Oxford, including pro-rata final payment exit fees equal to 7 % of the amount funded under the Oxford Term Loans.

In December 2025 and February 2026, the Company repaid an additional $ 3 million and $ 5 million to Oxford, respectively, including a pro-rata portion of the final payment exit fees.

Under the Oxford loan and security agreement, the Oxford Term Loans were subject to a floating interest rate 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 $ 25 million tranches and 7.00 % for the third $ 50 million tranche.

For the quarter ended March 31, 2026, the weighted average interest rate of the Oxford Term Loans was 11.2 %.

As of March 31, 2026, the Company reflected the carrying value of the Oxford Term Loans of $ 49.7 million in long-term debt on the condensed consolidated balance sheet as a result of its execution of the loan and security agreement with Hercules.

The carrying value above reflects an unamortized discount of $ 4.3 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 amortized into interest and other expense.

Under the Oxford loan and security agreement, among other covenants, the Company was subject to a financial covenant requiring it to maintain a minimum balance of unrestricted cash, cash equivalents, short-term investments, and restricted cash, including 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) fifty percent ( 50 %) of the outstanding principal amount of the Oxford Term Loans and (b) the required minimum amount of $ 29 million.

As of March 31, 2026, the Company reflected the $ 29 million minimum cash in the blocked account as restricted cash on the condensed consolidated balance sheet.

The Company was in compliance with its debt covenants as of March 31, 2026.

For additional information on the Company’s long-term debt obligations, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Commitments and Contingencies

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

In September 2025, we entered into a new lease for 25,000 square feet of office space in The Woodlands, Texas.

The term of this office 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 %.

As of September 30, 2025 and December 31, 2024, total right-of-use assets for the office space leases of $ 7.5 million and $ 4.8 million, respectively, are separately included in operating lease right-of-use-assets in the condensed consolidated balance sheet.

Current liabilities relating to the leases are included in accrued liabilities in the condensed consolidated balance sheet (as further described in Note 4, Supplemental Financial Information ) and long-term operating lease liabilities of approximately $ 6.8 million and $ 4.6 million, respectively, as of September 30, 2025 and December 31, 2024 are included in other long-term liabilities in the condensed consolidated balance sheet.

During each of the three and nine months ended September 30, 2025 and 2024, the Company incurred lease expense of $ 0.4 million and $ 1.3 million, respectively.

During each of the nine months ended September 30, 2025 and 2024, the Company made cash payments for lease liabilities of $ 1.0 million.

As of September 30, 2025 and December 31, 2024, the weighted-average remaining lease terms were 7.2 and 8.6 years, respectively, with weighted-average discount rates of 10.6 % for each year.

The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at September 30, 2025:

As of March 31, 2026 and December 31, 2025, the right-of-use assets for the office space leases of $ 7.1 million and $ 7.3 million, respectively, are separately included in operating lease right-of-use-assets in the condensed consolidated balance sheet.

Current liabilities relating to the leases are included in accrued

liabilities in the condensed consolidated balance sheet (as further described in Note 4) and long-term operating lease liabilities of $ 6.4 million and $ 6.6 million, respectively, as of March 31, 2026 and December 31, 2025 are included in other long-term liabilities in the condensed consolidated balance sheet.

During the three months ended March 31, 2026 and 2025, the Company incurred lease expense of $ 0.5 million and $ 0.4 million, respectively.

During the three months ended March 31, 2026 and 2025, the Company made cash payments for lease liabilities of $ 0.4 million and $ 0.3 million, respectively.

As of March 31, 2026 and December 31, 2025, the weighted-average remaining lease terms were 6.7 and 7.0 years, respectively, with weighted-average discount rates of 10.5 % for each year.

The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at March 31, 2026:

(in thousands)

11 unchanged sentences

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.

Compensation expense for the three months ended September 30, 2025 and 2024 of $ 3.4 million and $ 2.8 million, respectively, and for the nine months ended September 30, 2025 and 2024 of $ 9.7 million and $ 12.0 million, respectively, is recorded separately in research and development expense and selling, general, and administrative expense as noted on the Company’s condensed consolidated statements of comprehensive income (loss).

Compensation expense for the three months ended March 31, 2026 and 2025 of $ 3.1 million and $ 3.0 million, respectively, is recorded separately in research and development expense and selling, general, and administrative expense as noted on the Company’s condensed consolidated statements of comprehensive loss.

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

3 unchanged sentences

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 nine months ended September 30, 2025 and 2024:

The following weighted-average assumptions were used for stock options granted in the three months ended March 31, 2026 and 2025:

Expected Volatility Risk-free Interest Rate Expected Term Dividend

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Employees (1)

— % — % — — %

Officers and non-employee directors 104 % 3.8 % 6 — %

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Employees (1)

— % — % — — %

Officers and non-employee directors 115 % 4.3 % 6 — %

(1) For the three months ended March 31, 2026 and 2025, there were no stock options granted to non-officer employees.

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

6 unchanged sentences

Forfeited ( 107 ) 2.31

Outstanding at September 30, 2025 20,950 1.96

Exercisable at September 30, 2025 7,331 $ 3.63

Outstanding at March 31, 2026 25,282 1.80

Exercisable at March 31, 2026 10,239 $ 2.78

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

5 unchanged sentences

Forfeited ( 142 ) 0.70

Outstanding at September 30, 2025 15,469 $ 0.96

Outstanding at March 31, 2026 16,156 $ 1.06

During the three months ended March 31, 2026, the Company issued treasury shares totaling $ 5.2 million in lieu of issuing additional authorized common shares in order to satisfy the annual vesting of restricted stock units for its employees and officers.

Other Capital Agreements

Convertible Preferred Stock.

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.

2026 Common and Series B Preferred Stock Issuance.

In February 2026, Lexicon sold 34,089,403 shares of its common stock in an underwritten public offering for $ 1.30 per share resulting in net proceeds of approximately $ 40.6 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 for $ 1.30 per share and (b) 408,434.70 shares of its Series B Convertible Preferred Stock for $ 65.00 per share, which were convertible into 20,421,735 shares of common stock, resulting in aggregate gross proceeds of approximately $ 55.6 million.

In April 2026, following the approval by the Company’s shareholders of the Seventh Amended and Restated Certificate of Incorporation which increased the total authorized shares of common stock from 450,000,000 to 900,000,000 and the filing and acceptance of the Seventh Amended and Restated Certificate of Incorporation by the Secretary of State of Delaware, each share of preferred stock was converted into 50 shares of common stock at par value, or 20,421,735 shares in the aggregate.

Segment Information

4 unchanged sentences

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 income (loss)).

The CODM assesses financial performance based on consolidated net 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 income (loss), including segment expenses were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

(in thousands) (in thousands)

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

Three Months Ended March 31,

(in thousands)

Net product revenue $ 1,090 $ 1,262

Licensing revenue 13,154 — 40,698 —

Licensing and milestone revenue 20,000 —

Royalties and other revenue 12 —

6 unchanged sentences

Other segment expense (1)

3,570 6,169 9,643 15,558

Total operating expenses 22,098 26,941

3 unchanged sentences

Net loss $ ( 1,043 ) $ ( 25,295 )

(1) For the three and nine months ended September 30, 2025 and 2024, other segment expense includes stock compensation of (i) $ 1.8 million, $ 1.5 million, $ 5.0 million, and $ 4.7 million, respectively, related to research and development personnel and (ii) $ 1.6 million, $ 0.8 million, $ 4.6 million, and $ 4.7 million, respectively, related to general and administrative personnel.

For the three and nine months ended September 30, 2024, other segment expense primarily includes, among other items, stock compensation of $ 0.6 million and $ 2.6 million, respectively, related to sales and marketing personnel.

(2) For the three and nine months ended September 30, 2025, other segment expense includes, among other items, severance costs of $ 0.1 million and $ 0.2 million, respectively, related to research and development personnel.

For the three and nine months ended September 30, 2024, other segment expense includes, among other items, severance costs of (i) $ 2.5 million and $ 2.7 million, respectively, related to sales and marketing personnel and (ii) $ 0.9 million and $ 0.9 million, respectively, related to general and administrative personnel.

(1) For the three months ended March 31, 2026, other segment expense includes stock compensation of (i) $ 1.4 million related to research and development personnel and (ii) $ 1.7 million related to general and administrative personnel.

For the three months ended March 31, 2025, other segment expense primarily includes, among other items, stock compensation of (i) $ 1.6 million related to research and development personnel, (ii) $ 0.04 million related to sales and marketing personnel and (iii) $ 1.4 million related to general and administrative personnel.

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

What changed 10-Q

Item 1. Financial Statements