Nasdaq-listed Lexicon Pharmaceuticals Inc. (LXRX) reported positive data from a Phase 2 study of its sotagliflozin drug to treat type 1 diabetes. (See also: Qualcomm and Medtronic Team Up to Tackle Diabetes.)

The positive data briefly spiked Lexicon's share price by 4% during the morning trading session on October 25. The stock hit an intraday high of $16.40 per share, up from previous day’s close of $15.75. (For more, see The Top 5 Small-Cap Biotechnology Stocks for 2016.) 

The purpose of Lexicon's Phase 2 trial was to confirm the suitability of the dosage that will be selected for Phase 3. The Phase 2 trial used varying doses of the sotagliflozin drug (75 mg, 200 mg and 400 mg) versus a placebo.

Sotagliflozin Shown to Be Safe and Effective

In Phase 2, sotagliflozin caused type 1 diabetics to experience a statistically significant decline in blood sugar during the 12-week treatment.

The drug was also shown to be safe in the study. (For more, see: Is This Diabetes Stock a Better Bet Than MannKind?)

Sotagliflozin is an oral drug that inhibits two proteins which are responsible for glucose regulation (SGLT1 and SGLT2). SGLT1 handles glucose absorption in the gastrointestinal tract, while SGLT2 handles glucose reabsorption in the kidney.  

In type 1 diabetes, the body fails to produce insulin, which is a hormone needed to get glucose from the bloodstream into the cells of the body. Only 5% of all diabetic cases are type 1 diabetes, but there are around 1.25 million American children and adults battling type 1 diabetes.

Lexicon Pharmaceuticals is developing sotagliflozin with Sanofi SA (SNY), which has an exclusive, global license to develop, manufacture and commercialize sotagliflozin. Lexicon owns all of the clinical development activities for the drug, and has a significant role in marketing the drug in the US.

Lexicon, based in Woodlands, Texas, had announced positive top-line data from its first Phase 3 clinical trial in September 2016. Results from a second Phase 3 drug trial are expected in December.

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