Commitments and Contingencies

9 Months Ended

Sep. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

Operating Lease Obligations. Operating lease right-of-use assets and associated lease liabilities are recorded in the condensed consolidated balance sheet at the lease commencement date based on the present value of future lease payments to be made over the expected lease term. As the implicit rate is not determinable in its leases, Lexicon uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments. Lexicon does not apply this accounting to those leases with terms of twelve months or less.

Lexicon’s operating leases include leases of office space in The Woodlands, Texas and Bridgewater, New Jersey that will expire in January 2031 and January 2034, respectively. In September 2025, we entered into a new lease for 25,000 square feet of office space in The Woodlands, Texas. The term of this office lease extends through January 2031 and provides for escalating annual office rent and other fixed payments starting at approximately $0.8 million and increasing to approximately $0.9 million in the final year of the lease for total undiscounted cash payments of $4.5 million. In September 2025, the Company recorded a right-of use asset and right-of-use liability of approximately $3.2 million related to this new office lease based on the present value of future lease payments to be made over the expected lease term using a discount rate of approximately 11.9%.

As of September 30, 2025 and December 31, 2024, total right-of-use assets for the office space leases of $7.5 million and $4.8 million, respectively, are separately included in operating lease right-of-use-assets in the condensed consolidated balance sheet. Current liabilities relating to the leases are included in accrued liabilities in the condensed consolidated balance sheet (as further described in Note 4, Supplemental Financial Information) and long-term operating lease liabilities of approximately $6.8 million and $4.6 million, respectively, as of September 30, 2025 and December 31, 2024 are included in other long-term liabilities in the condensed consolidated balance sheet.

During each of the three and nine months ended September 30, 2025 and 2024, the Company incurred lease expense of $0.4 million and $1.3 million, respectively. During each of the nine months ended September 30, 2025 and 2024, the Company made cash payments for lease liabilities of $1.0 million. As of September 30, 2025 and December 31, 2024, the weighted-average remaining lease terms were 7.2 and 8.6 years, respectively, with weighted-average discount rates of 10.6% for each year.

The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at September 30, 2025:



	(in thousands)
2025	$	424
2026	1,649
2027	1,683
2028	1,718
2029	1,753
Thereafter	4,842
Total undiscounted operating lease liability	12,069
Less: amount of lease payments representing interest	(3,632)
Present value of future lease payments	8,437
Less: short-term operating lease liability	(1,642)
Long-term operating lease liability	$	6,795

Legal Proceedings. Lexicon is from time to time party to claims and legal proceedings that arise in the normal course of its business and that it believes will not have, individually or in the aggregate, a material adverse effect on its results of operations, financial condition or liquidity.