LEXICON PHARMACEUTICALS, INC.

Previous wording

Revenues were $0.7 million and $28.9 million, respectively, for the three months ended June 30, 2026 and 2025 and $21.8 million and $30.1 million, respectively, for the six months ended June 30, 2026 and 2025. Revenues for the six months ended June 30, 2026 included $20.0 million in development milestone revenue recognized from the Novo Nordisk licensing agreement. Revenues for the three and six months ended June 30, 2025 included $27.5 million in licensing revenue recognized from the Novo Nordisk licensing agreement. See Note 5, Collaborations and Strategic Alliances, for further information. Total revenues for each of the periods presented also include product revenues from sales of INPEFA.

Current wording

Revenues were $11.3 million and $14.2 million, respectively, for the three months ended September 30, 2026 and 2025 and $33.0 million and $44.3 million, respectively, for the nine months ended September 30, 2026 and 2025. Revenues for the three and nine months ended September 30, 2026 included $10.0 million and $30.0 million, respectively, in development milestone revenue recognized from the Novo Nordisk licensing agreement. Revenues for the three and nine months ended September 30, 2025 included $13.2 million and $40.7 million, respectively, in licensing revenue recognized from the Novo Nordisk licensing agreement. See Note 5, Collaborations and Strategic Alliances, for further information. Total revenues for each of the periods presented also included product revenues from sales of INPEFA.

Previous wording

Cost of sales during the three months ended June 30, 2026 and 2025 were less than $0.1 million for each of the periods and during the six months ended June 30, 2026 and 2025 were $0.1 million and less than $0.1 million, respectively. Cost of sales primarily consist of third-party manufacturing costs and freight associated with sales of INPEFA. Prior to receiving regulatory approval of INPEFA in May 2023, we had completed or begun the manufacturing of certain raw materials that were either received at “zero-cost” to us in conjunction with a terminated agreement in 2019 or recorded as research and development expense. We began capitalizing inventory manufactured subsequent to regulatory approval of INPEFA to the extent the related costs were expected to be recoverable through commercial sales.

Current wording

Cost of sales during the three months ended September 30, 2026 and 2025 were less than $0.1 million for each of the periods and during the nine months ended September 30, 2026 and 2025 were $0.2 million and less than $0.1 million, respectively. Cost of sales primarily consist of third-party manufacturing costs and freight associated with sales of INPEFA. Prior to receiving regulatory approval of INPEFA in May 2023, we had completed or begun the manufacturing of certain raw materials that were either received at “zero-cost” to us in conjunction with a terminated agreement in 2019 or recorded as research and development expense. We began capitalizing inventory manufactured subsequent to regulatory approval of INPEFA to the extent the related costs were expected to be recoverable through commercial sales.

Previous wording

As of June 30, 2026, we estimate the remaining amount of the zero-cost materials total approximately $21 million based on future manufacturing costs. A portion of this remaining “zero-cost” inventory will continue to support future sales of INPEFA which will result in a lower average per unit cost of materials until such inventory is depleted. Subsequent to the utilization of all of the remaining “zero-cost” inventory, we estimate our cost of goods sold as a percentage of net product revenue will be less than 10%.

Current wording

As of September 30, 2026, we estimate the remaining amount of the zero-cost materials total approximately $20 million based on current manufacturing costs. A portion of this remaining “zero-cost” inventory will continue to support future sales which will result in a lower average per unit cost of materials until such inventory is depleted. Subsequent to the utilization of all of the remaining “zero-cost” inventory, we estimate our cost of goods sold as a percentage of net product revenue will be less than 10%.

Previous wording

•Third-party services – Third-party services relate principally to our clinical trial and related development activities, such as preclinical and clinical studies and contract manufacturing. Overall, third-party services for the three months ended June 30, 2026 increased 20% to $10.6 million from $8.8 million, reflecting higher HCM study costs, and for the six months ended June 30, 2026 decreased 3% to $16.3 million from $16.8 million, reflecting lower LX9211 study costs upon completion of the Phase 2b activities in 2025, as compared to the corresponding periods in 2025.

Current wording

•Third-party services – Third-party services relate principally to our clinical trial and related development activities, such as preclinical and clinical studies and contract manufacturing. Overall, third-party services for the three months ended September 30, 2026 decreased 20% to $9.2 million from $11.5 million, and for the nine months ended September 30, 2026 decreased 10% to $25.6 million from $28.3 million, reflecting lower LX9211 external research expenses upon completion of the Phase 2b activities in 2025 partially offset by higher SONATA-HCM Phase 3 clinical trial expenses in 2026, as compared to the corresponding periods in 2025.

Previous wording

•Personnel – Salaries, bonuses, employee benefits, payroll taxes and recruiting costs are included in personnel costs. Personnel costs were $3.8 million for each of the three months ended June 30, 2026 and 2025. and decreased 1% to $8.2 million from $8.3 million for the six months ended June 30, 2026 as compared to the corresponding period in 2025.

Current wording

•Personnel – Salaries, bonuses, employee benefits, payroll taxes and recruiting costs are included in personnel costs. Personnel costs for the three months ended September 30, 2026 decreased 12% to $3.8 million from $4.3 million, and for the nine months ended September 30, 2026 decreased 5% to $11.9 million from $12.5 million as compared to the corresponding period in 2025.

Previous wording

•Stock-based compensation – Stock-based compensation expenses for the three months ended June 30, 2026 decreased 13% to $1.4 million from $1.6 million, and for the six months ended June 30, 2026 decreased 13% to $2.8 million from $3.2 million as compared to the corresponding periods in 2025.

Current wording

•Stock-based compensation – Stock-based compensation expenses for the three months ended September 30, 2026 decreased 22% to $1.4 million from $1.8 million, and for the nine months ended September 30, 2026 decreased 16% to $4.2 million from $5.0 million as compared to the corresponding periods in 2025.

Previous wording

•Facilities, equipment, and other –Facilities, equipment, and other costs relate primarily to rent, insurance, travel and training, and software licensing costs. Facilities, equipment, and other costs for the three months ended June 30, 2026 increased 7% to $1.6 million from $1.5 million, and for the six months ended June 30, 2026 increased 4% to $2.9 million from $2.8 million as compared to the corresponding periods in 2025.

Current wording

•Facilities, equipment, and other –Facilities, equipment, and other costs relate primarily to rent, insurance, travel and training, and software licensing costs. Facilities, equipment, and other costs for the three months ended September 30, 2026 increased 50% to $1.8 million from $1.2 million, and for the nine months ended September 30, 2026 increased 18% to $4.7 million from $4.0 million as compared to the corresponding periods in 2025.

Previous wording

•Personnel – Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs. Personnel costs for the three months ended June 30, 2026 decreased 14% to $3.1 million from $3.6 million, and for the six months ended June 30, 2026 decreased 28% to $6.2 million from $8.6 million as compared to the corresponding periods in 2025, primarily due to decreased headcount.

Current wording

•Personnel – Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs. Personnel costs for the three months ended September 30, 2026 increased 41% to $3.1 million from $2.2 million, and for the nine months ended September 30, 2026 decreased 15% to $9.3 million from $10.9 million as compared to the corresponding periods in 2025.

Previous wording

•Professional and consulting fees – Professional and consulting fees for the three months ended June 30, 2026 increased 27% to $3.3 million from $2.6 million, primarily due to higher consulting fees, and for the six months ended June 30, 2026 decreased 3% to $6.3 million from $6.5 million, primarily due to lower marketing costs, as compared to the corresponding periods in 2025.

Current wording

•Professional and consulting fees – Professional and consulting fees for the three months ended September 30, 2026 increased 20% to $3.0 million from $2.5 million, primarily due to pre-commercialization expenses, and for the nine months ended September 30, 2026 increased 3% to $9.3 million from $9.0 million, primarily due to pre-commercialization expenses and higher legal expenses, as compared to the corresponding periods in 2025.

Previous wording

•Stock-based compensation – Stock-based compensation expenses for the three months ended June 30, 2026 increased 25% to $2.0 million from $1.6 million, and for the six months ended June 30, 2026 increased 23% to $3.7 million from $3.0 million as compared to the corresponding periods in 2025.

Current wording

•Stock-based compensation – Stock-based compensation expenses for the three months ended September 30, 2026 increased 25% to $2.0 million from $1.6 million, and for the nine months ended September 30, 2026 increased 19% to $5.6 million from $4.7 million as compared to the corresponding periods in 2025.

Previous wording

•Facilities, equipment, and other – Facilities, equipment, and other costs relate primarily to rent, insurance, travel and training, and software licensing costs. Facilities, equipment, and other costs for the three months ended June 30, 2026 decreased 13% to $1.4 million from $1.6 million, and for the six months ended June 30, 2026 decreased 1% to $2.8 million from $2.9 million as compared to the corresponding periods in 2025.

Current wording

•Facilities, equipment, and other – Facilities, equipment, and other costs relate primarily to rent, insurance, travel and training, and software licensing costs. Facilities, equipment, and other costs for the three months ended September 30, 2026 increased 8% to $1.4 million from $1.3 million, and for the nine months ended September 30, 2026 increased 5% to $4.2 million from $4.0 million as compared to the corresponding periods in 2025.

Previous wording

Interest and Other Expense. Interest on the outstanding debt principal, amortization of debt issuance cost and discount, and changes in the fair value of warrants are included in interest and other expense. Interest and other expense for the three months ended June 30, 2026 increased to $2.6 million from $2.3 million, as compared to the corresponding period in 2025, and was $4.2 million for each of the six months ended June 30, 2026 and 2025.

Current wording

Interest and Other Expense. Interest on the outstanding debt principal, amortization of debt issuance cost and discount, and changes in the fair value of warrants are included in interest and other expense. Interest and other expense for the three months ended September 30, 2026 decreased to $1.1 million from $2.2 million, as compared to the corresponding period in 2025, and for the nine months ended September 30, 2026 decreased to $5.3 million from $6.3 million as compared to the corresponding periods in 2025.

Previous wording

Interest Income and Other. Interest earned on cash, cash equivalents and short-term investments is included in interest income and other. Interest income and other for the three months ended June 30, 2026 decreased to $1.7 million from $1.8 million, and for the six months ended June 30, 2026 decreased to $3.3 million from $4.1 million as compared to the corresponding periods in 2025.

Current wording

Interest and Other Income. Interest earned on cash, cash equivalents and short-term investments is included in interest and other income. Interest and other income for each of the three months ended September 30, 2026 and 2025 was $1.6 million, and for the nine months ended September 30, 2026 decreased to $4.9 million from $5.6 million as compared to the corresponding periods in 2025.

Previous wording

In connection with the repayment of the Oxford term loans in May 2026, the company recorded a loss on early extinguishment of debt of $4.3 million for the three and six months ended June 30, 2026. For further details, please see Note 6 of the Notes to Condensed Consolidated Financial Statements.

Current wording

In connection with the repayment of the Oxford term loans in May 2026, the company recorded a loss on early extinguishment of debt of $4.3 million for the nine months ended September 30, 2026. For further details, please see Note 6 of the Notes to Condensed Consolidated Financial Statements.

Previous wording

Net (Loss) Income and Net (Loss) Income per Common Share

Current wording

Net Loss and Net Loss per Common Share

Previous wording

Net loss was $31.8 million, or $0.07 per share, in the three months ended June 30, 2026 as compared to a net income of $3.3 million, or $0.01 per diluted share, in the corresponding period in 2025. Net loss was $32.8 million, or $0.08 per share, in the six months ended June 30, 2026 as compared to a net loss of $22.0 million, or $0.06 per share, in the corresponding period in 2025.

Current wording

Net loss was $14.0 million, or $0.03 per share, in the three months ended September 30, 2026 as compared to a net loss of $12.8 million, or $0.04 per share, in the corresponding period in 2025. Net loss was $46.8 million, or $0.11 per share, in the nine months ended September 30, 2026 as compared to a net loss of $34.8 million, or $0.10 per share, in the corresponding period in 2025.

Previous wording

As of June 30, 2026 and December 31, 2025, total cash, cash equivalents, short-term investments and restricted cash were $190.6 million and $125.2 million, respectively. We used cash of $23.9 million from operations in the six months ended June 30, 2026, primarily reflective of the net loss for the period of $32.8 million (which included total non-cash stock-based compensation expense of $6.4 million) and working capital changes. Investing activities used cash of $86.7 million in the six months ended June 30, 2026, primarily due to net purchases of investments. Financing activities provided cash of $88.2 million, primarily due to the common and preferred stock issuance as further described below.

Current wording

As of September 30, 2026 and December 31, 2025, total cash, cash equivalents, short-term investments and restricted cash were $183.2 million and $125.2 million, respectively. We used cash of $32.0 million from operations in the nine months ended September 30, 2026, primarily reflective of the net loss for the period of $46.8 million (which included total non-cash stock-based compensation expense of $9.8 million) and working capital changes. Investing activities used cash of $75.5 million in the nine months ended September 30, 2026, primarily due to net purchases of investments. Financing activities provided cash of $88.3 million, primarily due to the common and preferred stock issuance as further described below.

Previous wording

The first $55 million tranche was funded at closing. The second $20 million tranche is available for draw at our 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 our option, subject to Hercules’s consent, at any time prior to the expiration of the interest-only payment period. The amounts funded under the Hercules term loan bear interest at a floating rate equal to the prime rate plus 3.10%, but not less than 9.85%.

Current wording

The first $55 million tranche was funded at closing. The second $20 million tranche is available for draw at our 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 our option, subject to Hercules’s consent, at any time prior to the expiration of the interest-only payment period. The amounts funded under the Hercules term loan bear interest at a floating rate equal to the prime rate plus 3.10%, but not less than 9.85%. As of September 30, 2026, the interest rate of the Hercules Term Loan was 10.10%.

Previous wording

We are exposed to limited market and credit risk on our cash equivalents which have maturities of three months or less at the time of purchase. We had $190.6 million in cash and cash equivalents and short-term investments as of June 30, 2026. We maintain a short-term investment portfolio which consists of U.S. Treasury bills and corporate debt securities that mature three to 12 months from the time of purchase, which we believe are subject to limited market and credit risk. We currently do not hedge interest rate exposure or hold any derivative financial instruments in our investment portfolio.

Current wording

We are exposed to limited market and credit risk on our cash equivalents which have maturities of three months or less at the time of purchase. We had $183.2 million in cash and cash equivalents and short-term investments as of September 30, 2026. We maintain a short-term investment portfolio which consists of U.S. Treasury bills and corporate debt securities that mature three to 12 months from the time of purchase, which we believe are subject to limited market and credit risk. We currently do not hedge interest rate exposure or hold any derivative financial instruments in our investment portfolio.