Earnings Call Transcript - LXRX Q2 2025

Operator, Operator

Welcome to the Lexicon Pharmaceuticals Second Quarter 2025 Financial Results Conference Call. As a reminder, this call is being recorded today, August 6, 2025. I will now turn the call over to Lisa DeFrancesco, SVP, Investor Relations and Corporate Communications for Lexicon. Please go ahead, Lisa.

Lisa M. DeFrancesco, SVP, Investor Relations and Corporate Communications

Thank you, Josh. Good morning, and welcome to our second quarter 2025 conference call. Joining me today are Dr. Mike Exton, Lexicon's Chief Executive Officer and Director; Dr. Craig Granowitz, Senior Vice President and Chief Medical Officer; and Scott Coiante, Senior Vice President and Chief Financial Officer. This morning, Lexicon issued a press release announcing our financial results for the second quarter of 2025, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of this call, along with a slide presentation, is also available on our website. During this call, we will review the information provided in the press release, provide a corporate update, and then use the remainder of our time to answer your questions. Before we begin, let me remind you that we will be making forward-looking statements, including statements related to the safety, efficacy, clinical development, regulatory status, and therapeutic and commercial potential of pilavapadin, LX9851, sotagliflozin, and our other drug programs, as well as our business generally. These statements may also include characterizations and projections relating to the clinical development, regulatory status, and market opportunity for our drug programs and the commercial performance of INPEFA for heart failure. This call may also contain forward-looking statements relating to our growth and future operating results, discovery and development of our drug candidates, strategic alliances and intellectual property, as well as other matters that are not historical facts or information. Various risks may cause our actual results to differ materially from those expressed or implied in such forward-looking statements, and we refer you to our most recent annual report on Form 10-K and other SEC filings for detailed information describing such risks. I would now like to turn the call over to Mike Exton. Mike?

Michael S. Exton, CEO

Yes. Thank you, Lisa, and good day, everyone. Thanks for joining. We're excited to provide you updates on the quarter and all of the great work going on at Lexicon. When we entered 2025, as you recall, we're still in the early days of our strategic pivot to becoming an R&D-focused company. Now, in the second half of the year, I can say that this transformation has truly taken shape. We've made great strides against our objectives for the year across the board. We're now in a very strong position to advance our innovative portfolio of potential medicines. I'm pleased to report that all of our lead R&D programs continue to be on track. We've made important progress against each of them in the second quarter, which I would like to highlight briefly. For pilavapadin, we've completed the secondary analysis of our Phase IIb progress results following the announcement of top-line data in the first quarter. We're now in the process of analyzing the totality of Phase II data, which supports the broad potential for this novel mechanism while reengaging in discussions with potential partners with this additional data in hand. Secondly, LX9851, our first-in-class candidate for the treatment of obesity, is on track to complete IND-enabling studies in 2025. We look forward to continued collaboration with our licensee, Novo Nordisk. For sotagliflozin, we've hit the accelerator on our Phase III SONATA study in hypertrophic cardiomyopathy, which is the only Phase III HCM program currently enrolling, evaluating sotagliflozin in both obstructive and nonobstructive subtypes of HCM. We have made excellent progress on site initiations globally, and Craig will elaborate on this shortly. Lastly, we are working closely with our licensee, Viatris, on expanding the reach of sotagliflozin in territories outside of the U.S. and EU, and we're making great progress on that front as well. In summary, the team is hard at work, and it was an incredibly productive quarter for us, which I'm very proud of. I want to take a moment to acknowledge a milestone: July marked one year since I joined as CEO of Lexicon. Reflecting on all the changes we've seen in that 12 months, I'm truly proud of the dedication and adaptability of this team. We successfully advanced multiple programs to late-stage development and beyond, and we look forward to reporting even more progress to come. On that note, I would like Craig to give a more detailed update on our pipeline programs. So, over to you, Craig.

Craig B. Granowitz, CFO

Thanks, Mike. I'll start by discussing pilavapadin. First quarter, we announced top-line results of our Phase IIb PROGRESS study of pilavapadin in DPNP. DPNP is a chronic and progressive pain disorder that impacts approximately 30% of people with type 1 diabetes and up to 50% of those with type 2 diabetes. These patients experience burning pain, loss of sensation, and other side effects that can severely impact their quality of life. Importantly, in both our Phase IIb PROGRESS study and our Phase IIa RELIEF study, pilavapadin 10 milligrams delivered consistent clinically meaningful reductions in these painful symptoms. Based on these data, we have concluded that the 10-milligram dosage strength warrants further evaluation and is the appropriate dose to take forward into late-stage development. We recently convened a scientific advisory board with expertise across clinical development, regulatory, and neuropathic pain to review the full body of evidence for pilavapadin in DPNP. This esteemed group provided encouraging feedback and validated our key findings from the top-line data readouts, including the following: first, the advisory board confirmed that pilavapadin demonstrates clinically meaningful efficacy; second, they confirmed the 10-milligram dose is the appropriate dose for future registrational studies; third, the board reaffirmed the safety and tolerability profile of the 10-milligram dose supports advancement into late-stage development; and finally, they provided validation and valuable input into Phase III study design, including suggestions to potentially lower the placebo response rate, which we believe could reduce potential study variability. The panel support gives us tremendous confidence as we prepare for our next steps and engage with potential partners for pilavapadin. It reinforces our belief that we have a potentially transformative therapy for the millions of patients living with this debilitating condition. I also wanted to acknowledge that our analysis of the pilavapadin development program supports its compelling value proposition, with a validated mechanism of action of AAK1, a compelling clinical profile, and broad potential applicability across multiple indications, demonstrating why we believe pilavapadin represents a true portfolio and a pill opportunity. Overall, beginning with efficacy, pilavapadin has demonstrated consistent and clinically meaningful pain reduction across three separate Phase II trials in neuropathic pain. While our lead indication in DPNP represents a mature clinical development program that is ready for Phase III advancement, several secondary indications such as spasticity are also Phase II ready, providing significant pipeline expansion opportunities. In addition, our preclinical work has been extensive. We've completed IND-enabling studies across multiple neuroscience indications, both central and peripheral, establishing a broad foundation for further clinical development beyond our current focus areas. We've accumulated data from more than 600 patients treated with pilavapadin to date, demonstrating a suitable safety and tolerability profile. This extensive safety database will be valuable as the program moves into late-stage development and regulatory discussions. Finally, pilavapadin benefits from patent protection extending through 2040 when including an anticipated five-year patent term extension, providing substantial commercial exclusivity to maximize the value of our investment in this area. Moving on to sotagliflozin in HCM, there are more than one million people with HCM in the United States. Of those, our previous research suggests approximately one-third have nonobstructive HCM and two-thirds have obstructive HCM, in which the thickening of the heart muscle wall blocks or reduces blood flow to the heart. However, more recent technology, including more sensitive diagnostics and AI-assisted tools, suggest that the incidence of nonobstructive HCM could be much higher, potentially 50% or greater. This chronic progressive disease can lead to more serious complications. 43% of patients with HCM have progressive heart failure, and HCM can also lead to atrial fibrillation and stroke. The medical community's understanding of how to diagnose and treat HCM has grown significantly in recent years, with a number of innovations in development for HCM, including the approval of cardiac myosin inhibitors for obstructive HCM. However, despite substantial commercial investment and increased awareness of HCM, cardiac myosin inhibitors have only penetrated approximately 1% of the total HCM market. With this treatment landscape in mind, we believe sotagliflozin offers several unique advantages as a potential therapeutic option for HCM. First, it has a novel mechanism of action as a dual mechanism SGLT1, SGLT2 inhibitor and is the only HCM agent under investigation that works both inside and outside the heart. This enables treated patients to potentially achieve symptom reduction while simultaneously targeting other outcomes such as heart failure and major adverse cardiovascular events where sotagliflozin has demonstrated benefits. Second, as more data is generated, it is becoming increasingly clear that sotagliflozin is uniquely myocardially targeted. From a practical standpoint, the once-daily oral dosing profile facilitates broad clinical adoption, convenience, and compliance. Importantly, this comes without the burden of risk evaluation and mitigation strategies or REMS requirements that can complicate treatment. It is worth noting that sotagliflozin is already approved for heart failure. To date, we've observed no increased risk of atrial fibrillation, which is a critical consideration in this patient population. Looking forward, we're pursuing a broad proposed indication that encompasses both nonobstructive and obstructive HCM phenotypes. This positions sotagliflozin for potential use as monotherapy or in combination with other agents, providing clinicians with valuable flexibility in treatment planning. We have amassed a wealth of data from studies confirming sotagliflozin's mechanism of action in HCM and related conditions summarized here. Specifically, the animal models studied demonstrate sotagliflozin improves cardiac function and reduces wall thickness, left ventricular mass, fibrosis, and cardiac inflammation, while the ex vivo models demonstrate the direct effects of sotagliflozin on the myocardium by reducing both stroke work and increasing metabolites associated with improved cardiac energetics. Collectively, these studies provide evidence that sotagliflozin has a unique ability to work across multiple markers of the disease. Now I want to spend some time discussing the current ongoing clinical program, beginning with our own Phase III SONATA-HCM study of sotagliflozin in HCM. SONATA-HCM is a large global registration trial with a KCCQ primary endpoint designed to support a regulatory filing and broad label in HCM. SONATA-HCM is the only ongoing registrational trial currently evaluating a treatment in both obstructive and nonobstructive HCM. We have recently surpassed 100 sites initiated in 20 countries, including the U.S., Europe, Israel, and Latin America, and we're well positioned to meet our goal of 130 sites actively enrolling patients by the end of the third quarter of 2025. There are two important investigator-initiated studies underway designed to evaluate the cardiac function of sotagliflozin in HCM. The first is SOTA-P-CARDIA being conducted by Dr. Juan Badimon and colleagues at the Mount Sinai School of Medicine in New York City. This study is designed to investigate the cardiorenal mechanistic benefits of sotagliflozin in 88 nondiabetic patients with HFpEF, which, as you recall, is a subset of HCM. It is a six-month study comparing sotagliflozin 400 milligrams and placebo on the following endpoints: change in left ventricular mass, functional performance, and quality of life measurements. This study was completed in July 2025, and the investigators are currently evaluating the data. The second study I wanted to highlight is SOTA-CROSS, a twelve-week crossover study funded by the NIH and being conducted by Dr. Sharlene Day at the Penn School of Medicine comparing sotagliflozin and placebo on exercise capacity, physical activity, symptoms, and diastolic function in patients with symptomatic nonobstructive HCM. We already have shown that sotagliflozin strongly improves diastole in HFpEF. SOTA-CROSS aims to specifically ascribe such functional benefits in non-HCM as well. Together with SONATA-HCM, this study could potentially be a major therapeutic advance for a large subset of patients with limited treatment options. Lastly, we remain on track to complete the IND-enabling studies this year for LX9851, our first-in-class ACSL5 inhibitor for the treatment of obesity and related metabolic disorders. LX9851's oral administration, preclinical findings to date, and the possibility for both monotherapy and combination applications provides a compelling profile with the potential to occupy a unique space in the treatment landscape. We look forward to working with our partner, Novo Nordisk, to maximize the potential of this innovative investigational medicine. Now, I will pass it over to Scott Coiante, our CFO, who will provide a report of our financial results for the second quarter.

Scott M. Coiante, CFO

Thank you, Craig, and good morning, everyone. For the second quarter of 2025, we reported $28.9 million in revenue compared to $1.6 million for the second quarter of 2024. Q2 2025 revenue consisted primarily of $27.5 million of licensing revenue recognized from the Novo Nordisk agreement. As a reminder, we received the upfront payment of $45 million from Novo in April, which was initially recorded as deferred revenue and is being recognized as revenue throughout the remainder of 2025 as the IND-enabling work is completed. Total revenues for the quarter also include net product revenue of $1.3 million from sales of INPEFA. Research and development expenses for the second quarter of 2025 decreased to $15.7 million from $17.6 million in Q2 2024, primarily reflecting lower external research expense on our PROGRESS clinical trial study, partially offset by increased investment in our SONATA Phase III clinical study in HCM. Selling, general, and administrative expenses for the second quarter of 2025 decreased to $9.4 million compared to $39.2 million in 2024. The decrease reflects lower costs due to our strategic repositioning announced in late 2024 and the significantly reduced marketing efforts in 2025 for INPEFA. Net income for the second quarter of 2025 was $3.3 million or $0.01 per share compared to a net loss of $53.4 million or $0.17 per share in the corresponding period in 2024. The net income for the quarter was primarily a result of the revenue recognized from the Novo Nordisk licensing agreement in Q2. We expect to recognize the remaining $17.5 million of licensing revenue from the Novo agreement in the second half of this year as the IND-enabling work is completed. We ended the second quarter with $168 million in cash, short-term investments, and restricted cash compared to $238 million as of December 31, 2024. In summarizing our financials, I would like to note a few highlights from the quarter. We've used the $45 million upfront payment received from Novo licensing agreement to strengthen our balance sheet by reducing a portion of our long-term debt. On the expense side, we've made significant progress reducing our costs and streamlining our operations. Quarter-over-quarter operating expenses decreased by $31.9 million, primarily due to the strategic repositioning as an R&D-focused company announced late in 2024. Reviewing our full-year 2025 guidance, we're lowering our operating expense projections for the year. Total operating expenses are now expected to be in the range of $105 million to $115 million from $135 million to $145 million previously announced. R&D expenses are now projected to be in the range of $70 million to $75 million, down from a range of $100 million to $105 million, primarily due to the transfer of costs to Novo under our licensing agreement with them. SG&A expenses remain between $35 million and $40 million. Our R&D expense assumptions do not include costs associated with Phase III pivotal studies of pilavapadin as our goal will be to take this asset forward with a development partner. Overall, we are in a strong position with the resources we need to advance our ongoing clinical programs while maintaining a disciplined approach to capital allocation and a focus on creating value for our shareholders. Now, I'll turn the call back to Mike for closing remarks.

Michael S. Exton, CEO

Yes. Thanks, Scott and Craig. Now as you... Apologies for that brief interruption. Let me go back and say that we have lots of exciting updates in the second half of 2025. As we have outlined, partnering is an essential part of how we plan to advance all of our assets. On this slide, it highlights the partnership strategy and action. Firstly, Viatris is making great progress and has recently received its first approval of sotagliflozin in the United Arab Emirates, which was a really short turnaround time. They have also filed for regulatory approval in Saudi Arabia and are expecting to file for regulatory approval in Canada, Australia, New Zealand, Mexico, and a number of Southeast Asian countries before the end of this year. We aim to maximize the potential of LX9851 with our licensee, Novo Nordisk, a global expert in obesity and related conditions. Partnership discussions are ongoing for pilavapadin, where we hope to collaborate with a high-quality partner to unlock the pipeline and appeal potential of this asset globally and across multiple indications. This flexible partnership strategy is intended to allow us to follow the science broadly while remaining focused internally on our core cardiometabolic expertise. As you can see on this slide, we're exceptionally well-positioned with a number of pipeline opportunities from our late-stage assets to our newest opportunities. Whether organically or with a partner, we expect these programs to continue to add value and bring new innovation to patients over the longer term. As we look further into 2025, we're excited about where Lexicon stands at this moment. Beginning with pilavapadin, we're expecting full progress data to be presented in Q3, also planning our end of Phase II meeting with timing dependent on our partnership discussions. Our preclinical work to broaden the value of this asset into additional indications continues. Additionally, a broad partnership for pilavapadin will allow us to become therapeutically focused on our core cardiometabolic programs and expertise. For sotagliflozin in HCM, our SONATA study is making excellent progress. Sites in the U.S., EU, Israel, and LatAm are currently enrolling, and we expect all Phase III sites to be running by Q3. We also expect results from certain investigator-initiated studies of sotagliflozin as early as Q4 of this year, which could provide valuable additional insights to the body of data on this therapeutic candidate. For INPEFA, Viatris is continuing to handle regulatory submissions and approvals outside the U.S. and EU. They've been a fantastic partner, fully engaged and motivated. We expect these approvals to build significantly on the stabilized sales of INPEFA in the U.S., achieved by a strong mix of focused execution and innovation. For Zynquista, the end-of-review evaluation process is underway. As you've no doubt seen, there has been an outpouring of patient support advocating for the approval of Zynquista in type 1 diabetes, and we're committed to pursuing all potential avenues for this program. Lastly, LX9851, our IND-enabling studies for obesity are progressing very well, with target completion by the end of the year. Across this pipeline, any of these programs has the potential to transform patient lives and create significant value for Lexicon. We believe that the simultaneous advancement of all five programs makes our position compelling as we move through 2025, where we have a significant amount of opportunities for success. With that, we conclude our introductory remarks and turn it to you, operator, for some Q&A.

Operator, Operator

Our first question comes from Yasmeen Rahimi with Piper Sandler.

Liam Latham Hiester, Analyst

This is Liam on for Yasmeen Rahimi. Great presentation this morning. We were really impressed by the SOTA-CROSS trial that's upcoming with potential data in late 2026. We're just wondering if you can walk us through, given the small sample size of the study, what are the doses being assessed and how much the inclusion/exclusion criteria resemble SONATA, and whether you expect to see a static separation on the efficacy endpoint and also why an HCM was selected rather than an OHCM patient population?

Craig B. Granowitz, CFO

Yes. Thank you, Liam, for the question. We're really excited about working with Dr. Day on this NIH-supported mechanistic trial. The idea behind the NIH's interest in this was to continue to explore therapeutic options outside the cardiac myosin inhibitors that would be much more widely applicable and readily implementable across the United States for this large unmet medical need. Nonobstructive HCM was also the target for the NIH grant because there are options available for obstructive, including surgical and medical options, but there are no treatment options that have been approved for nonobstructive. The relatively small size of the study belies its significant power to accomplish its goals. By utilizing a crossover design, you use the patient as their own control in the study. The study has a number of important imaging and physiologic outcomes. The inclusion criteria are very similar to those in the SONATA-HCM trial, which is a broad cross-section of patients without diabetes who have nonobstructive HCM. The only difference is that in SOTA-CROSS, there's no allowance for patients on a cardiac myosin inhibitor, but in SONATA-HCM, there is. We believe that if you consider all of the data together in its totality and how we are strategically thinking about life cycle management, we are looking at the totality of the benefit of sotagliflozin across the range of heart failure, major adverse cardiovascular events, and HCM using different trials to examine different aspects. One of the reasons we presented all three of SONATA-HCM, SOTA-CROSS, and the SOTA-P-CARDIA study is that they are looking at different aspects of the physiology and clinical findings of patients with HFpEF and HCM.

Operator, Operator

Our next question comes from Andrew Tsai with Jefferies.

Lin Tsai, Analyst

A couple of questions on pain. Recently, RFK Jr. mentioned how he wanted to promote the development of non-opioid pain drugs like Vertex's JOURNAVX. Is there something you can do to take advantage of this new development? Could, for instance, it make sense to apply to the Commissioner's National Priority Voucher Program?

Michael S. Exton, CEO

Yes. Thanks, Andrew. In fact, my team has been very actively engaged from a legislative perspective, particularly with the Alternatives to PAIN Act, supporting the use of non-opioid medications in chronic pain. We have been really supporting the utility and the passing of that particular act, seeing bipartisan support for this important aspect of managing pain. In addition to that, like we have done with type 1 diabetes, there are also patient advocacy groups that are very compelled to push for new treatments. All of these factors are indicators of a zeitgeist realization that, particularly for chronic pain, even though there are new alternatives for acute pain, the real issue for non-opioid alternatives lies within chronic use over many years, where the addictive potential is more significant. We are very encouraged by the bipartisan enthusiasm in this area, and as we progress pilavapadin into Phase III and beyond, this not only supports continuing to develop pilavapadin but provides a pathway for increased access and ease for patients getting onto this non-opioid medication once it achieves commercial reality.

Lin Tsai, Analyst

It sounds like you will have the FDA meeting by year-end now. In theory, what would be the realistic 'worst-case scenario' that can arise from that meeting?

Craig B. Granowitz, CFO

Yes. Thank you, Andrew. It's Craig. I can answer your question. It is validating to hear other companies discussing their pain program Phase III approaches in DPNP. We have already met with the FDA on this program, and I think their feedback is going to be similar to what we've already heard from them. You will need two parallel studies in the lead indication for neuropathic pain. It is highly unlikely that with a single indication or a single study in two indications, you could get a broad neuropathic pain indication. This was always our expectation, and it was affirmed by the FDA, our advisory board, and acknowledged by other companies. The timing of our program and the magnitude remain unchanged. We will conduct two parallel trials in DPNP with possibly different geographies or slightly different designs, but primarily the same primary endpoint of neuro pain score at week 12. Based on all the data we've seen across our program's totality, we believe that the size of those studies to appropriately power them is similar to what we've communicated—two-arm studies of roughly 600 patients each with a single active arm and a placebo control arm.

Operator, Operator

Our next question comes from Caroline DePaul with Citi.

Caroline DePaul, Analyst

This is Caroline on for Yigal Nochomovitz. What is Novo's plan for the Phase I in obesity? Are there plans to combine with GLP-1?

Craig B. Granowitz, CFO

In discussions with Novo, I want to thank our entire team for having a great collaboration with Novo. As you've heard in the marketplace from both Lilly, Novo, and other companies, the market is moving towards oral options and combination options. The data we've presented already on the use of LX9851 as an oral once-daily agent or the expectation of that, both with semaglutide and other agents being studied for weight loss and the potential for triple combinations. LX9851 is positioned to be part of that set of development programs.

Michael S. Exton, CEO

If I could just provide one comment over the top of that. We've been very fortunate with both of our partners, Viatris and Novo Nordisk. The enthusiasm and capabilities they bring for both of these assets are stellar. Although Novo is undergoing some changes at the moment, our engagement and interaction and their enthusiasm and drive for this asset remain strong. We expect that Novo will approach the Phase I program vigorously shortly after the IND.

Operator, Operator

Our next question comes from Joe Pantginis with H.C. Wainwright.

Joseph Pantginis, Analyst

A couple of housekeeping questions. Regarding the OpEx guidance, does this include or not include stock-based compensation?

Scott M. Coiante, CFO

It does include stock-based compensation.

Joseph Pantginis, Analyst

Great. A couple of comments here that have been coming up about the end of Phase II meeting for pilavapadin. Do you feel this is still on track, and do you feel this is the ultimate rate-limiting step for your partnering plans?

Michael S. Exton, CEO

I don't think it's a rate-limiting step, Joe. Our approach has been to have an initial round of discussions with partners during the top-line discussions. Three important things have happened: we completed the secondary analyses from progress; we’re now bringing the totality of the Phase II program data to bear, and we held a scientific advisory board meeting, which featured top individuals in this space. Their endorsement, as we theorized, reinforces that the 10-milligram dose is the appropriate dose to move forward into Phase III, which builds our confidence not only internally but also in our discussions with potential partners. How we approach the end of Phase II meeting will depend on engagement from partners around whether they want to be part of that, observe the outcome, and then move forward. We're progressing at speed.

Joseph Pantginis, Analyst

Totally fair. On HCM, can Craig provide any color on the impressive site ramp-up? Are there any comments from the field regarding views towards CMI or CMI competition for patients?

Craig B. Granowitz, CFO

Yes. Great question, Joe. I want to address this in two different ways. First, we have an open window of enrollment. There are no active ongoing registrational trials now in HCM. ODYSSEY ended without a long-term extension, which provides a fair runoff period in that trial where patients are available without treatment options. We have a golden opportunity for enrollment as we have numerous sites with patients that are symptomatic, both obstructive and nonobstructive, regardless of whether they're on a CMI. Regarding enrollment, there seems to be a speed limit in the capacity of the field to start new patients on CMIs due to echo scheduling. Unlike CMIs, sota does require a baseline echo, but we do not require multiple echoes during treatment, which differentiates us. Initial blinded data shows that we’re enrolling more nonobstructive patients in the U.S. than obstructive, as expected. This will likely shift outside the U.S. because CMIs are largely not available globally.

Michael S. Exton, CEO

In the last three to six months, KOLs have been becoming more aware of sotagliflozin in HCM, which is put forth by the progress of SONATA and noise around nonobstructive treatments. They see, based on evidence from our program, that this could be a real option for nonobstructive HCM. Additionally, broader capillary practices featuring HCM and HFpEF patients show potential. To have one medicine that can treat both without fear or favor is compelling, especially in general cardiology practices where the majority of HCM patients are treated.

Operator, Operator

Our next question comes from Mazahir Alimohamed with Leerink Partners.

Unidentified Analyst, Analyst

Just two from us. First, given Vertex's recent announcement about their VX-993 and its inability to meet its primary endpoint in the Phase II, how does that impact your confidence in the overall pain market and the ability to conduct a careful Phase III trial? Secondly, Craig, I noticed that you mentioned that there's going to be an echo for every patient when they start the trial. Is that something you would expect if approved as well? Would you expect commercially that they would have an echo before being started on the drug?

Michael S. Exton, CEO

Great questions. Please pass on our best regards. Regarding Vertex and their VX-993, I think in fact that gives us greater confidence in our own program. We've shown three times across Phase II programs in neuropathic pain that we can differentiate from placebo with the 10-milligram dose. We have always been somewhat skeptical of Nav 1.8 in neuropathic pain. The evidence in acute pain is mixed. Our novel mechanism of action should be appreciated given the current complexities observed with others. Our partners will understand as well as we engage for future discussions. Regarding Craig's comment on echo, these patients will receive an echo regardless. I believe many issues in HCM are tied to echoes due to the nature of ejection fraction reductions caused by CMIs. Our drug, which targets heart failure without negative effects related to ejection fraction, might allow for less restrictive echo requirements from a patient suitability standpoint.

Craig B. Granowitz, CFO

To reiterate, I think there may be slightly less stringent echo requirements for patients once the therapy is approved, although monitoring echo and ejection fraction is still a standard of care for symptomatic heart failure patients in the United States.

Michael S. Exton, CEO

I appreciate the insights and reflections surrounding the ongoing discussions. It's rewarding to see the progress and dedication, and we hope to maintain the momentum moving forward.

Operator, Operator

I would now like to turn the call back over to Mike Exton for any closing remarks.

Michael S. Exton, CEO

Thank you for joining, everyone, and thanks for the questions. I've done numerous quarterly earnings calls since joining, and this quarter is one I'm most proud of for two reasons: the team has driven all programs in parallel to their next inflection point, and we've done so while focusing our resources and capital allocation to add value. Those factors have led to a dramatically advanced pipeline and a revised outlook for expenses for the year, ensuring we are spending wisely. I couldn't be prouder of the team. I look forward to Q3 as we experience multiple important developments over the next three months, and I will update you then. Thank you very much.

Operator, Operator

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.