Neothetics Files $63M IPO to Advance Drug That Melts “Love Handles”

Belly Fat, "Love Handle" Fat Roll, Liposuction

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: [[ticker: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

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.