Citi Boosts Lexicon Pharmaceuticals Outlook on Novo Nordisk Partnership Progress
In a move highlighting growing confidence in its pipeline, Lexicon Pharmaceuticals (NASDAQ: LXRX) received a price target upgrade from Citi analyst Yigal Nochomovitz. The target was lifted from $1.90 to $2.10, with a Buy rating reaffirmed, driven by an updated financial model that factors in upcoming milestones from the company's strategic partnership with diabetes and obesity giant Novo Nordisk.
The biopharma firm's recent third-quarter 2025 results underscored the partnership's early financial impact. Lexicon reported revenue of $14.2 million, predominantly fueled by $13.2 million in licensing revenue from Novo Nordisk. This contributed to a significantly narrowed net loss of $12.8 million ($0.04 per share), a marked improvement from a $64.8 million loss in the prior-year period.
Key development milestones are shaping the bullish sentiment. Lexicon has completed all IND-enabling studies for its obesity candidate, LX9851, and transferred the package to Novo Nordisk for clinical development. Concurrently, the company is expanding the commercial reach of its heart failure drug, INPEFA, into international markets through licensee Viatris, and has submitted additional data to the FDA for its type 1 diabetes therapy, Zynquista.
Analyst & Investor Perspectives:
"The narrowed losses and steady royalty stream from Novo provide a crucial runway," says Michael Torres, a portfolio manager at a healthcare-focused fund. "It de-risks the story while the market awaits Phase I data on LX9851."
"This is a classic 'show me' story," argues Dr. Sarah Chen, a biotech analyst known for her skeptical takes. "A price target just over $2? That reeks of minimal conviction. Until we see clinical proof that LX9851 can differentiate itself in a crowded obesity field, this is just financial engineering on a tiny scale."
"For a small-cap biotech, having a deep-pocketed partner like Novo is everything," notes David Park, a retail investor following the sector. "It validates the science and funds the burn. The updated model from Citi just quantifies that reduced risk."
Lexicon Pharmaceuticals focuses on discovering and commercializing treatments for neuropathic pain, heart failure, and metabolic diseases. The upgraded outlook reflects a broader trend of analysts rewarding biotechs with clear, partner-funded paths to key catalysts.