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. As of June 30, 2026 and December 31, 2025, the right-of-use assets for the office space leases of $6.9 million and $7.3 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) and long-term operating lease liabilities of

$6.2 million and $6.6 million, respectively, as of June 30, 2026 and December 31, 2025 are included in other long-term liabilities in the condensed consolidated balance sheet.

During the three months ended June 30, 2026 and 2025, the Company incurred lease expense of $0.5 million and $0.4 million, respectively. During the six months ended June 30, 2026 and 2025, the Company incurred lease expense of $1.0 million and $0.8 million, respectively. During the six months ended June 30, 2026 and 2025, the Company made cash payments for lease liabilities of $0.9 million and $0.7 million, respectively. As of June 30, 2026 and December 31, 2025, the weighted-average remaining lease terms were 6.5 years and 7.0 years, respectively, with weighted-average discount rates of 10.5% for each year.

The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at June 30, 2026:



	(in thousands)
2026	$	795
2027	1,683
2028	1,718
2029	1,753
2030	1,863
Thereafter	2,979
Total undiscounted operating lease liability	10,791
Less: amount of lease payments representing interest	(2,987)
Present value of future lease payments	7,804
Less: short-term operating lease liability	(1,642)
Long-term operating lease liability	$	6,162

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.