By Thomas Lee
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 raised at least $10 million from big venture capital firms including Spray Ventures in Newton, Mass., Thomas, McNerney Partners in Minneapolis and Technology Partners of Palo Alto, Calif. Like Roseville, Minn.-based EnteroMedics Inc., Leptos was developing a device that used electricity to manipulate signals between the brain and stomach.
While EnteroMedics’ VBLOC therapy is designed to interrupt signals along the vagus nerve to reduce feelings of hunger, Leptos’ technology aimed to stimulate the splanchnic nerve that 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.
Leptos’ demise could be 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 & Drug Administration.
But 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 implanted with a placebo device, a result that sent EnteroMedics stock plummeting from $5 to less than $1 and prompted the company to 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.
After consulting with the FDA, EnteroMedics recently said it would conduct another clinical trial.
