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ST. PAUL, Minn. (


) -- The



implantable weight-loss device known as VBLOC is a

pulsing placebo


The company's

hopes that VBLOC would be a fat zapper

were dashed Thursday night with the release of top-line results from the phase III study known as RECHARGE. Patients implanted with an active VBLOC device lost just 8.5% more "excess weight" than those implanted with a dummy (non-working) device.

The result missed statistical significance by a wide margin, with a p value of 0.70.

EnteroMedics tried to spin the disastrous results from the RECHARGE trial as a near miss and said it would still seek FDA approval for the VBLOC device.

A previous phase III study of VBLOC, known as EMPOWER, also failed.

Investors weren't fooled, sending EnteroMedics shares down 53% to $1.35 in Thursday's after-hours trading session.

VBLOC is a surgically implanted device that uses electrical pulses to block the primary nerve regulating digestion. Unlike pacemakers, patients power the EnteroMedics' VBLOC device on and off with a control belt worn around the waist. When VBLOC is on, patients are supposed to feel less hungry, eat less and lose weight.

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Except patients didn't lose weight. Obese patients implanted with a fully operational VBLOC device achieved a 24.4% average "EWL" compared to 15.9% for patients implanted with a sham device.

"EWL" stands for excess weight loss and is calculated as a percentage equal to total weight loss in the trial (the numerator) divided by the difference in baseline weight and "ideal weight" using a BMI of 25 (the denominator.)

In order for the study to be successful, VBLOC was required to hit a 10% statistical superiority margin over the sham device. From a non-statistical perspective, that meant the VBLOC EWL needed to be approximately 20% higher than the EWL of the sham device. Clearly, the 8.5% numerical difference came nowhere close to a 20%.

VBLOC also missed another efficacy measure of weight loss that served as the study's co-primary endpoint.

EnteroMedics didn't provide any details on the mean weight loss or body mass index of the patients enrolled in the study, making it impossible to calculate the actual weight loss by VBLOC patients.

However, we can make an educated guess that the placebo-adjusted EWL of 8.5% equates to about 8 pounds lost over the course of a year-long course of treatment. For a patient with a BMI of 41, weighing 240 pounds, that translates into 3% weight loss over one year, or roughly the same percentage weight loss achieved by

Arena Pharmaceuticals'

(ARNA) - Get Arena Pharmaceuticals, Inc. Report

recently approved weight loss pill Belviq.


(VVUS) - Get VIVUS, Inc. Report

weight-loss pill Qsymia is more effective than VBLOC.

Of course, Belviq and Qsymia are pills easily swallowed. VBLOC requires a device to be implanted in the abdomen and turned on 9-12 hours per day.

EnteroMedics will have a real challenge convincing FDA to approve a minimally effective weight-loss device based on data from two failed phase III studies. Even if approved, the commercial potential is tiny given inferiority to more convenient pills.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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