FRIDLEY, Minnesota — Leptos Biomedical Inc., a start-up developing a neurostimulation device to treat obesity, is shutting down.
In a brief phone interview, CEO Hans Neisz declined to say why. The move was sudden and unexpected but had nothing to do with financing, he said.
Leptos had raised at least $10 million from big venture capital firms like Thomas, McNerney Partners in Minneapolis, Technology Partners in Palo Alto, Calif. and Spray Ventures in Newton, Mass. Like EnteroMedics Inc. in Roseville, the company was developing a device that used electricity to manipulate signals between the brain and stomach.
While EnteroMedics’ VBLOC therapy focused on interrupting signals along the vargus nerve to reduce feelings of hunger, Leptos’ technology aimed to stimulate one of the splanchnic nerves. That nerve controls a person’s “fight-or-flight” system, a series of reactions to perceived danger that prompts the body to release more energy and burn fat.
Some industry observers wondered if Leptos’ demise is related to EnteroMedics’ troubled clinical trials. Of all the companies developing neurostimulation devices to treat obesity, EnteroMedics was the closest to winning approval from the Food and Drug Administration. Thus, the industry carefully watched EnteroMedics’ progress.
However, last fall, EnteroMedics said it failed to meet the primary goals of its pivotal study. The company’s Maestro device didn’t perform any better than patients who were implanted with a placebo device. As a result, EnteroMedics stock plummeted from $5 to less than $1 and the company cut its workforce by 40 percent.
If EnteroMedics, which spent years and tens of millions of dollars to develop Maestro, couldn’t prove its technology, companies like Leptos would also face an uphill battle.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
After consulting with the FDA, EnteroMedics recently said it would conduct another clinical trial, which, of course, requires more time and money, things that seem to be in short supply these days.
