Lexicon Pharmaceuticals (LXRX): Down But Not For Long

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Lexicon Pharmaceuticals, Inc. (NASDAQ: LXRX)

Lexicon Pharmaceuticals is having a rough day in the market today. However, I don’t think that the declines are likely to last. The reality is that the company released incredibly positive data with regard to a phase 3 test of an experimental drug yesterday; which will likely prove to be incredibly profitable in the long run. Today, we’ll talk about the data we saw yesterday, why LXRX is declining today, and what we can expect to see moving forward. So, let’s get right to it…

Lexicon Pharmaceuticals Meets Primary Endpoint

Yesterday, Lexicon Pharmaceuticals climbed by more than 50% in a single trading session after announcing that they had met their primary endpoint in Phase 2 clinical testing of telotristat etiprate; an experimental medication designed to treat cancer patients with carcinoid syndrome that is not adequately controlled by the current standard of care. The study compared the affects of telotristat etiprate to the affects of a placebo; proving that their experimental drug is effective in treatment.

What We’re Seeing From LXRX In The Market Today & Way

LXRX is having a tough day in the market today; currently (11:54) trading at $12.66 per share after a loss of 6.91% so far. However, I’m not very concerned about the declines we’re seeing today. As a matter of fact, what we’re seeing today is nothing more than normal market movement. One factor that’s important to remember in situations like this is the fact that price movements in the market tend to happen through a series of overreactions. Therefore, after yesterday’s positive news, the stock got pushed up a bit higher than it should have. As a result, we’re seeing declines today; bringing the value down to a more realistic level. Nonetheless, none of this should be concerning in the least.

What We Can Expect To See Moving Forward

Moving forward, I’m expecting to see overwhelmingly positive news. As mentioned above the company met its primary endpoint in testing of its experimental drug, telotristat etiprate. Therefore, the next step will be a new drug application with the FDA. When the new drug application is submitted, we can expect to see more massive gains. Also, the treatment being studied could turn out to be the first change to standard of care in more than a decade and a half and prove to be incredibly profitable in the long run. So, if you’re looking to get in on the long run gains, today’s declines may be your opportunity to do so at a discount.

What Do You Think?

Where do you think LXRX is headed and why? Let us know in the comments below!

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