Lexicon Announces Plans for Rights Offering to Stockholders

THE WOODLANDS, Texas, Nov. 11, 2011 /PRNewswire/ -- Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX) today announced plans for a rights offering pursuant to an effective shelf registration statement in which its stockholders will receive non-transferable subscription rights to purchase up to 144,247,800 shares of its common stock in the aggregate.

In the rights offering, stockholders will receive one non-transferable subscription right for every share of common stock owned as of November 21, 2011, which is the record date for the rights offering.  Each subscription right will entitle stockholders to purchase a pro rata number of shares of common stock at a subscription price of $1.13 per share.  Stockholders who exercise their basic subscription privilege in full may also exercise an over-subscription privilege to purchase additional shares that remain unsubscribed at the expiration of the rights offering, subject to availability.  If the rights offering is fully subscribed, aggregate gross proceeds to Lexicon will be approximately $163 million.

Lexicon is conducting the rights offering at the election of two of its largest stockholders, Invus, L.P. and Invus C.V., pursuant to their contractual rights to require Lexicon to initiate a pro rata rights offering to its stockholders.  Invus, L.P. and Invus C.V. will be required to exercise their basic subscription privileges in full and purchase a minimum of approximately 68,869,016 shares of common stock in the rights offering, subject to certain customary closing conditions, including the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.  In light of the potential for the ownership percentage of Invus, L.P., Invus C.V. and their affiliates to increase to greater than 50% of Lexicon's outstanding common stock as a result of the rights offering, the parties intend to make the required filings for that purpose with the Premerger Notification Office of the Federal Trade Commission and the Antitrust Division of the Department of Justice.

The rights offering is expected to commence on or about November 22, 2011 and is expected to expire 30 days following commencement.  Lexicon may extend the rights offering period or cancel the rights offering at any time for any reason, with the consent of Invus, L.P. and Invus C.V.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor will there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale is not permitted.  The offering of securities in the rights offering will be made only by means of a final prospectus supplement and accompanying prospectus.

Lexicon has filed a registration statement (including a base prospectus) with the Securities and Exchange Commission, or SEC, for the rights offering to which this communication relates.  Before you invest, you should read the prospectus in that registration statement and related prospectus supplements and other documents that Lexicon has filed or will file with the SEC for more complete information about Lexicon and the rights offering.  You may obtain these documents for free by visiting EDGAR on the SEC website at www.sec.gov.

About Lexicon

Lexicon is a biopharmaceutical company focused on discovering breakthrough treatments for human disease.  Lexicon currently has four drug programs in mid-stage development for diabetes, irritable bowel syndrome, carcinoid syndrome and rheumatoid arthritis, all of which were discovered by Lexicon's research team.

Safe Harbor Statement

This press release contains "forward-looking statements," including statements relating to Lexicon's expectations regarding the completion, timing and size of the rights offering.  Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements.  Words such as "anticipated," "will," "proposed" and similar expressions are intended to identify these forward-looking statements.  There are a number of important factors that could cause Lexicon's results to differ materially from those indicated by these forward-looking statements, including risks and uncertainties related to market conditions and the satisfaction of customary closing conditions related to the rights offering.  There can be no assurance that Lexicon will be able to complete the rights offering on the anticipated terms, or at all.  Additional risks and uncertainties relating to the rights offering, Lexicon and its business can be found under the headings "Factors Affecting Forward Looking Statements" and "Risk Factors" in Lexicon's annual report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission, in Lexicon's other filings with the Securities and Exchange Commission and under the heading "Risk Factors" in the final prospectus supplement relating to the rights offering to be filed with the Securities and Exchange Commission.  Unless required by applicable law, Lexicon undertakes no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Lexicon Pharmaceuticals, Inc.