Bullish Case: Positive trial results, particularly for Sotagliflozin, and increasing insider buying could rejuvenate confidence in LXRX, potentially reversing its declining trend and driving substantial price appreciation.

Bearish Case: Continued regulatory scrutiny from the FDA paired with poor sentiment post-leadership changes may lead to further declines, particularly if upcoming results fail to inspire investor confidence.

Potential Outcomes:

• Successful drug trials (40% chance) - Could generate positive sentiment and sell-off reversals.
• Continued FDA concerns (45% chance) - May lead to prolonged price downtrends.
• Neutral outlook with limited movement (15% chance) - Historical returns support potential stagnation.

Trading Oracle: Consider a bullish stance using a long call debit spread strategy by purchasing 4 $2.00 calls and selling 2 $2.50 calls, targeting expiration in January 2025. High implied volatility enhances payoff potential, while aligning with predicted mean reversion and upcoming trial outcomes.

November 23, 2024