A biotech company developing an injectable drug to shrink the excess fat that forms “love handles” says it plans to raise more than $63 million through an IPO.
San Diego-based Neothetics, previously known as Lithera, has substantial backing from Domain Associates and its Russian investment partner, Rusnano MedInvest. San Francisco-based Alta Partners also holds a minority stake in the company, which was founded in 2007.
After completing a mid-stage clinical trial of its lead drug candidate with 513 patients, Neothetics plans to use its IPO cash to advance to late-stage clinical trials. The company reported “a statistically significant reduction” in belly fat among patients who received injections of Neothetics lead compound, dubbed LIPO-202.
When Neothetics was just beginning the mid-stage trial in early 2013, CEO George Mahaffey said he hoped to emulate the success of Calabassas, CA-based Kythera Biopharmaceuticals (NASDAQ: KYTH), which had developed another injectable drug (sodium deoxycholate) for shrinking fat under the chin. Kythera went public two years ago, and Wall Street has embraced it, driving the company’s valuation to more than $760 million. In July, Kythera said the FDA had accepted its new drug application for regulatory review.
LIPO-202 is an injectable version of salmeterol xinafoate, a selective beta agonist already approved by the FDA as an aerosol inhalant for treating asthma (and marketed by GlaxoSmithKline as Serevent). The company says its studies suggest that salmeterol activates fat cell receptors, triggering a metabolic process called lipolysis that shrinks fat cells.
As an alternative to liposuction, Neothetics says there is currently no FDA-approved drug approved for reducing localized subcutaneous belly fat in non-obese patients, a process the company calls “body contouring.” Neothetics plans to target healthy people who are under 45 years old, and says women account for about 87 percent of the potential market. According to its IPO filing, Americans spent more than $12 billion on … Next Page »