Neothetics' abdominal bulging drug fails in trials, stock plunges

Last Updated: 2015-12-14

By Reuters Staff

(Reuters) - Neothetics Inc said its experimental drug to reduce abdominal bulging failed in two late-stage studies, sending its shares down 78% in extended trading.

The safety and tolerability of the drug, LIPO-202, was measured using two independent assessment scales, with patients expected to achieve a two point or greater change on both scales.

The trials tested the drug on 1,584 patients for eight weeks against a placebo, with the aim of reducing subcutaneous fat in the abdominal area.

LIPO-202 is an injectable formulation of salmeterol xinafoate, which activates certain receptors on fat cells, triggering the breakdown of fat.

Neothetics said on Monday it would analyze the data from both trials to evaluate future plans for the drug.

The company specifically develops treatments for the esthetic market and the second drug in its pipleline is to treat thyroid-related eye-disease.