(Reuters) - Lexicon Pharmaceuticals Inc said its experimental drug to treat diabetes reduced the use of insulin at meal times in a mid-stage study of patients with type 1 diabetes, sending the company's shares up as much as 17 percent.
Lexicon said the drug, codenamed LX4211, reduced the total dose of insulin taken by patients at meal times by 32 percent, compared with a 6 percent reduction in patients given a placebo.
Morningstar analyst Karen Andersen said Lexicon would have to find a partner to fund late-stage development of the drug as a treatment for type 1 and type 2 diabetes.
"This (data) obviously gives them more leverage in negotiations, and could be enough to allow them to finally lock in a deal," she said.
Wedbush Securities analyst Liana Moussatos, however, said Lexicon might not need a partner if it was allowed by the U.S. health regulator to pursue LX4211 as a treatment for just type 1 diabetes, without having to test the drug for type 2 diabetes.
LX4211 is designed to delay the absorption of glucose in the digestive tract and its reabsorption by the kidney, to increase the excretion of excess sugar through the urine.
Johnson & Johnson's drug Invokana uses a similar mechanism to treat type 2 diabetes.
A similar drug developed jointly by AstraZeneca Plc and Bristol-Myers Squibb Co was approved by the FDA in January for type 2 diabetes patients.
Lexicon said on Monday that the latest data supported late-stage development of LX4211 for use with insulin in the treatment of type 1 diabetes, which occurs when the body's immune system destroys pancreatic cells that produce insulin.
There was no reported increase in hypoglycemia, a condition where blood glucose falls after a patient takes too much insulin, causing dizziness, fatigue and in some cases, unconsciousness, the company said.
The drug was well tolerated in the study, in which 33 patients with poorly controlled type 1 diabetes received a placebo or LX4211 once daily for 28 days. No patients discontinued treatment due to adverse events.
Lexicon, which is also testing the drug for type 2 diabetes, is in talks with partners to fund its late-stage development.
The company said in October that the drug reduced blood glucose after a meal in a study on patients with type 2 diabetes and moderate-to-severe renal impairment.
In January, the company said it would cut 45 percent of its workforce and its chief executive would leave as the company shifted focus from drug discovery to completing late-stage studies of its drugs.
Lexicon's shares were up about 4 percent at $1.65 in noon trading on the Nasdaq.
(Editing by Kirti Pandey)