Lexicon Pharmaceuticals entered into a $100 million loan facility with Hercules Capital, Inc. on May 4, 2026. The facility provides up to $100 million in borrowing capacity, with an initial $55 million tranche funded at closing to repay an existing Oxford Finance loan and to support the company’s late‑stage cardiometabolic programs.
The remaining $45 million is split into two subsequent tranches: a $20 million tranche and a $25 million tranche. The facility carries a floating interest rate equal to the prime rate plus 3.1%, with a floor of 9.85%. An initial 18‑month interest‑only period is followed by up to two six‑month extensions. The loan matures on May 4, 2030, and is secured by a first lien on all Lexicon assets.
The facility includes customary covenants, including a minimum cash covenant effective June 1, 2027, which can be extended upon the achievement of specified clinical, regulatory, and financial milestones. The structure gives Lexicon flexibility to deploy capital opportunistically while preserving equity and avoiding dilution.
The primary purpose of the financing is to support the company’s late‑stage cardiometabolic pipeline, particularly the SONATA‑HCM Phase III enrollment and potential regulatory submissions for its sotagliflozin platform. The initial tranche also repays the Oxford Finance loan, which originally provided up to $150 million in borrowing capacity and carried a weighted average interest rate of 11.40% as of December 31, 2025.
Scott Coiante, Lexicon’s Chief Financial Officer, said, "By refinancing our existing loan facility with Hercules Capital, a strong partner with a history of supporting biotech innovation, we are expanding our access to non‑dilutive capital and gaining additional flexibility to opportunistically deploy capital on value‑creating initiatives, including the advancement of our pipeline of late‑stage cardiometabolic programs." Adam Soller, Managing Director at Hercules Capital, added, "Hercules Capital is pleased to support Lexicon Pharmaceuticals with a flexible financing solution that will support it through upcoming clinical and regulatory milestones. This partnership underscores our commitment to funding innovative therapies that address significant unmet medical needs."
The non‑dilutive capital strengthens Lexicon’s balance sheet, extends its runway, and reduces financial risk, providing a buffer for future clinical and commercial milestones. The refinancing of the Oxford loan also potentially offers more favorable terms and greater flexibility. With $125.2 million in cash and investments as of December 31, 2025, and an additional $100 million raised in February 2026, the company is well positioned to fund its pipeline while maintaining financial resilience.
The loan facility’s structure, with milestone‑triggered tranches and a long maturity, aligns capital availability with the company’s development timeline, ensuring that funding is available when key clinical and regulatory milestones are achieved. This strategic financing supports Lexicon’s goal of bringing its sotagliflozin platform to market and advancing other cardiometabolic candidates, positioning the company for future growth and potential market leadership.
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