Exhibit 10.1
 
PURCHASE AGREEMENT

October 8, 2009

Invus, L.P.
c/o The Invus Group, L.L.C.
750 Lexington Avenue (30th Floor)
New York, New York 10022

Lexicon Pharmaceuticals, Inc.
8800 Technology Forest Place
The Woodlands, Texas 77381
Attn:  President and Chief Executive Officer

Ladies and Gentlemen:

Reference is made to (a) that certain Stockholders’ Agreement, dated as of June
17, 2007 (as amended, the “Stockholders’ Agreement”), by and between Invus, L.P.
(the “Investor”) and Lexicon Pharmaceuticals, Inc. (the “Company”), (b) the
Amendment to Securities Purchase Agreement, dated as of October 7, 2009 (the
“Amendment”), amending that certain Securities Purchase Agreement, dated as of
June 17, 2007, by and between the Investor and the Company (the “Securities
Purchase Agreement”), and (c) that certain Underwriting Agreement being entered
into by the Company with the representatives of the underwriters concurrently
with this Purchase Agreement (the “Underwriting Agreement”) providing for the
issuance by the Company to the underwriters of 19,894,076 shares of Company
Common Stock (the “Firm Shares”), without giving effect to any exercise of the
underwriters’ over-allotment option, for sale in a public offering at a price to
the public of $1.50 per share (the “Price to Public”).  Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to them in the
Stockholders’ Agreement.

Pursuant to Section 4.02 of the Stockholders’ Agreement and Section 8 of the
Amendment, on the terms and subject to the conditions set forth herein, the
Investor hereby agrees to purchase from the Company the number of shares
specified below (the “Invus Shares”) of Company Common Stock at a price per
share equal to the Price to Public, for the total purchase price specified
below:

 
Number of Shares:
13,439,257 shares of Company Common Stock
       
Total Purchase Price:
$20,158,885.50

The Company hereby represents and warrants to and agrees with the Investor to
all the same representations and warranties contained in Section 1 and the
covenants contained in Section 6 (other than the last paragraph thereof) of the
Underwriting Agreement mutatis mutandis to the same extent as if such
representations and warranties and covenants were set forth herein for the
benefit of the Investor instead of the underwriters party to the Underwriting
Agreement (except that references to the Underwriting Agreement therein shall be
references to this Agreement and references to the Shares thereunder shall be
references to the Invus Shares). The obligation of the Investor to purchase the
Invus Shares from the Company, and of the Company to sell the Invus Shares to
Invus, will be subject to (i) the satisfaction of the conditions set forth in
the Underwriting Agreement (other than clauses (i) and (j) thereunder) and the
concurrent closing of the sale of the Firm Shares under the terms set forth in
the Underwriting Agreement, (ii) the delivery to the Investor of opinions of
counsel to the Company by the same counsel and covering the same matters (except
that references to the Underwriting Agreement therein shall be references to
this Agreement and references to the Shares thereunder shall be references to
the Invus Shares) as set forth in Sections 4(c), (d) and (e) and (iii) the
delivery to the Investor of the officer’s certificate contemplated by Section
4(b) of the Underwriting Agreement, and such obligations shall terminate in the
event the Underwriting Agreement is terminated.  The Company shall cause the
Invus Shares to be listed on the NASDAQ Global Market.

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The closing of the sale of the Invus Shares shall take place concurrently with
the closing of the sale of the Firm Shares under the Underwriting Agreement, (i)
with payment for the Invus Shares to be made to the Company by wire transfer of
immediately available funds on the closing date and (ii) with delivery of the
Invus Shares registered in the name of Invus, L.P. or its designee and free and
clear of all liens (other than those under applicable law, the Stockholders
Agreement and the “lock-up” agreement entered into between the Investor and the
underwriters party to the Underwriting Agreement), with any transfer or stamp
taxes duly paid, to the Investor.

This Agreement shall be deemed to satisfy the Company’s obligations under the
Stockholders’ Agreement with respect to the delivery of a Notice of Issuance
with respect to the Firm Shares.

This Agreement shall automatically terminate upon any termination of the
Underwriting Agreement.  The provisions of Sections 9.03 and 9.04 and Article X
of the Securities Purchase Agreement are incorporated herein by reference and
shall apply to this Agreement mutatis mutandis.

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Sincerely,
       
INVUS, L.P.,
a Bermuda limited partnership
       
By:
/s/ Raymond Debbane
 
Name:
Raymond Debbane
 
Title:
President, Invus Advisors, L.L.C.,
its General Partner

 

Accepted and agreed to:
   
LEXICON PHARMACEUTICALS, INC.,
a Delaware corporation
   
By:
/s/ James F. Tessmer
Name:
James F. Tessmer
Title:
Vice President of Finance and Accounting