The move will save $14M for the rest of this year and $22M annually after that.
Lexicon is shifting its focus from drug discovery to completing the trials of therapies that are in late-stage development.
The company will now mainly concentrate on treatments for diabetes and carcinoid syndrome, which affects patients with a rare cancerous tumor.
The cost cuts come after Lexicon said last month that its irritable bowel syndrome medicine failed in Phase III testing.
"Lexicon "essentially acknowledged that a promised partnership for the diabetes drug LX4211 isn't happening, forcing the company to move the drug into phase III studies on its own," writes Adam Feuerstein. (PR)