Back in 2014, San Diego-based Neothetics raised $65 million by selling shares at $14 a pop after winning over a group of investors to back its plans to develop an aesthetic fat-buster. This morning, the much shrunken shares were eviscerated, dropping deep into penny stock territory as the company read last rites over a Phase II proof-of-concept study.
Company execs said that the drug failed to distinguish itself in any way from a placebo and they were crystal clear in their assessment of its potential, saying the data were “unambiguous.” The stock $NEOT quickly cratered, nose diving more than 70% Monday morning.
The question now is where the biotech goes from here, in the wake of a decisive failure of its only therapy.
“We are determining the path forward for the company,” said Kim Kamdar, a member of Neothetics’ 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.”
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