Lexicon gets $5 million milestone as Takeda chooses LG474 as development target

By E. Janene Geiss

Philadelphia, March 2 - Lexicon Genetics Inc. said Thursday that Takeda Pharmaceutical Co. Ltd. has selected LG474 for therapeutic development.

LG474 is a target that was discovered by Lexicon in its Genome5000 program. Under terms of their research alliance, the selection by Takeda of a target for therapeutic development entitles Lexicon to a $5 million research milestone payment, according to a company news release.

In July 2004, Lexicon and Takeda entered into an alliance to develop new drugs directed against promising hypertension targets discovered in Lexicon's Genome5000 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, officials said.

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 said it also is entitled to receive royalties on worldwide sales of drugs commercialized by Takeda.

"We are pleased that, after extensive research, Takeda supports our positive assessment of the value of the LG474 target and is committed to advancing this drug discovery program into development," Arthur T. Sands, president and chief executive officer of Lexicon, said in the release.

As a result of this research milestone payment, Lexicon said that it expects its revenue for the three months ending March 31 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.

Lexicon Genetics, based in The Woodlands, Texas, is a biopharmaceutical company focused on the discovery and development of breakthrough treatments for human disease. Lexicon focuses on discovering the physiological and behavioral functions of genes to identify potential points of therapeutic intervention or drug targets.

Takeda Pharmaceutical is a research-based pharmaceutical company with headquarters in Osaka, Japan.

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