8. Earnings (Loss) Per Share

The following is a summary of Lexicon’s earnings (loss) per share calculations and reconciliations of basic to diluted earnings (loss) per share.



	Three Months Ended September 30,					Nine Months Ended September 30,

(In thousands, except per share amounts)	2019		2018			2019		2018
Numerator:
Net income (loss)	$	226,086	$	(27,396	)	$	181,271	$	(103,765	)
Add interest expense on Convertible Notes	1,277		—			3,790		—
Adjusted net income (loss)	$	227,363	$	(27,396	)	$	185,061	$	(103,765	)

Denominator:
Shares used in computing net income (loss) per common share, basic	106,272		105,881			106,200		105,800
Add effect of potential dilutive securities:
Share based awards	3		—			177		—
Convertible Notes	10,365		—			10,365		—
Shares used in computing net income (loss) per common share, diluted	116,640		105,881			116,742		105,800

Net income (loss) per share - basic	$	2.13	$	(0.26	)	$	1.71	$	(0.98	)
Net income (loss) per share - diluted	$	1.95	$	(0.26	)	$	1.59	$	(0.98	)

For periods presented with a net loss, the weighted average number of shares outstanding are the same for both basic and diluted net loss per common share. The average number of shares associated with stock options and restricted stock units that were excluded from diluted earnings per share that would potentially dilute earnings per share in the future was 10,576 and 7,501, respectively, for the three months ended September 30, 2019, and 2018, and 8,452 and 7,501, respectively, for the nine months ended September 30, 2019 and 2018. For periods presented with a net loss, the shares associated with the Convertible Notes are not included in the computation of diluted earnings per share because they are antidilutive.