The therapeutic target, LG474, was discovered by Lexicon in its Genome5000 program. In July 2004, Lexicon and Takeda entered into an alliance to develop new drugs directed against promising hypertension targets discovered in the Lexicon program.
In this program, Lexicon is using its proprietary gene knockout technology to rapidly discover the functions of 5,000 of the most pharmaceutically important genes in the human genome. Takeda is responsible for the screening, medicinal chemistry, preclinical and clinical development and commercialization of drugs directed against Lexicon’s targets, and bears all related costs.
The financial consideration to Lexicon under the alliance consisted of a $12 million upfront payment and includes research milestone payments for each target selected for therapeutic development and clinical development and product launch milestone payments related to the development and commercialization of drugs resulting from the alliance. Lexicon is also entitled to receive royalties on worldwide sales of drugs commercialized by Takeda.
As a result of this research milestone payment, Lexicon announced that it expects its revenue for the three months ending March 31, 2006 to range from $18 million to $20 million, which is above Lexicon’s original revenue guidance of $13 million to $15 million for the quarter. Lexicon also reiterated its full year 2006 revenue guidance of $78 million to $82 million.