Monday turned out to be a nightmare for shareholders of Neothetics Inc (NASDAQ:NEOT) after the small biotech disclosed that its top-line safety and efficacy results from its Phase 2 proof-of-concept trial, LIPO-202-CL-31, for the reduction of submental subcutaneous fat. LIPO-202 did not demonstrate improvement on any efficacy measurements or separation from placebo.

Neothetics shares reacted to the disappointing news, collapsing nearly 70% to $0.69 in pre-market trading.

“We are determining the path forward for the company,” said Kim Kamdar, Ph.D., a member of Neothetics’ Operating Committee and Board of Directors.  “Our primary objective is to maximize value for our shareholders, and we will be expeditious and diligent in deciding next steps. We will share our future plans shortly.”

“We are disappointed in these results, which are unambiguous,” said Dr. Dan Piacquadio, head of Neothetics’ Development Committee. “We want to thank our investigators and their patients who participated in this study.”

LIPO-202-CL-31 was a multi-center, randomized, double-blind, placebo-controlled Phase 2 proof of concept trial to evaluate the safety and efficacy of two doses of LIPO-202 versus placebo for the reduction of submental bulging due to subcutaneous fat.  The trial enrolled 162 subjects at 12 sites across the United States.  Subjects were randomized 1:1:1 and received up to either 0.3 mcg, or 3.0 mcg dose of LIPO-202, or placebo.  Subjects received up to 30 subcutaneous injections of LIPO-202 or placebo once a week for eight weeks and follow up visits to assess safety and efficacy occurred one week and four weeks post the last treatment.

The study endpoints included both safety and efficacy measurements.  Efficacy measures assessed improvement in the subject’s submental region as evaluated by both the patient and clinician, covering overall subject satisfaction and evaluation of submental fat thickness by calipers.

Neothetics had $9.7M in cash as of the end of the first fiscal quarter in 2017.

Neothetics, Inc. operates as a holding company, which provides clinical-stage specialty pharmaceutical and developing therapeutics for the aesthetic. It focuses on localized fat reduction and body contouring. The company products include LIPO-202, is a injectable formulation of the long-acting ß2-adrenergic receptor agonist, salmeterol xinafoate.