August 3, 2010 (FinancialWire) (Go to http://www.financialwire.net/?s=ftrdnwswnd for all of today’s featured news.) — Lexicon Pharmaceuticals, Inc. (NASDAQ: LXRX) said that it has exercised a restructured purchase option under its drug development financing collaboration with Symphony Icon Holdings LLC and acquired all the equity of Symphony Icon, Inc., thereby reacquiring all rights to LX1031, LX1032, LX1033 and the other drug programs subject to the collaboration.

According to Lexicon, LX1031 is an orally-delivered serotonin synthesis inhibitor that acts locally in the gastrointestinal tract targeting tryptophan hydroxylase, an enzyme necessary for the production of serotonin.

Lexicon said that LX1031 recently demonstrated positive results in a Phase 2 clinical trial in patients with diarrhea-predominant and mixed forms of irritable bowel syndrome.

LX1032 is an orally-delivered serotonin synthesis inhibitor that acts peripherally to inhibit tryptophan hydroxylase without affecting brain serotonin levels. LX1032 is currently in a Phase 2 clinical trial in patients with carcinoid syndrome.

LX1033 is a locally acting serotonin synthesis inhibitor, reportedly with enhanced potency in IND-enabling studies.

Lexicon and Symphony Icon Holdings agreed to revised terms under which Lexicon paid Symphony Icon Holdings $10 million upon closing and agreed to make certain additional deferred and contingent payments, payable at Lexicon's option in cash, common stock or a combination of cash and common stock, subject to certain conditions.

The additional deferred payments, which will be due on or before July 30, 2013, will be in an amount equal to $50 million less a 50% share of the expenses Lexicon incurs for the future development of LX1031, LX1032, LX1033 and related drug candidates, subject to certain exceptions and up to an aggregate reduction of $15 million.

Lexicon said it may make the deferred payments in whole or in part at any time that it chooses within the payment period. The contingent payments will consist of a 50% share of any consideration Lexicon receives from licensing LX1031, LX1032, LX1033 and related drug candidates up to a maximum of $30 million plus the amount of any reduction in the deferred payment amount.

The contingent payments will be due if and when Lexicon receives such licensing consideration.

Texas-based Lexicon currently has four drug candidates in mid-stage development for diabetes, irritable bowel syndrome, carcinoid syndrome and rheumatoid arthritis, all of which were discovered by Lexicon's research team.

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