Harkness Pharmaceuticals Inc., a virtual company bankrolled by Sanderling Ventures to develop an appetite-suppressing treatment for obesity, has completed a Phase I/II clinical trial that will determine its fate.

The San Diego company, which has raised $5 million from Sanderling since forming in 2003, the most recent a $1 million financing done in the first quarter, completed dosing last month and expects to have data by year's end, said Sanderling Principal Peter C.M. McWilliams, a member of the Harkness board.

After seeing results, Harkness will choose from among several options, which include building up further, licensing out its lead compound and selling the company. Managing Director Timothy J. Wollaeger serves as chief executive.

Harkness's lead drug candidate is enterostatin, one of several natural agents that promote a feeling of satiety after eating. Unlike other agents in this pathway, enterostatin can be taken orally. The Phase I/II trial started early this year and encompassed about 20 obese but otherwise healthy adults. Though its primary endpoints are safety and tolerability, the firm also expects the study to yield insight into the drug's ability to suppress appetite, McWilliams said.

Because enterostatin is natural, it is likely to be safe, McWilliams said. In addition, there may be ways to determine which patients are best suited to the drug, he said, though he declined to elaborate.

About a third of U.S. adults are obese, according to the 2003-2004 National Health and Nutrition Examination Survey. One benefit Sanderling sees to Harkness's approach: medications such as Meridia, sold by Abbott Laboratories, have proven that appetite control can work. Meridia blocks the re-uptake of the neurotransmitters serotonin and norepinephrine, which help regulate sense of fullness, according to Abbott.

The market for appetite-controlling drugs is likely to grow more competitive. Orexigen Therapeutics Inc., which went public in April after raising capital from Scale Venture Partners, Sofinnova Ventures Inc., Domain Associates LLC and others, is developing two such products in late-stage trials: Contrave, now in Phase III, and Empatic, which is in a Phase IIb trial. Each is designed to act on specific neurons of the central nervous system to achieve appetite control and sustained weight loss, according to Orexigen.

Medical device investors also see potential in appetite control. In April Latterell Venture Partners led a tranched $20 million Series C for Leptos Biomedical Inc., a Brooklyn Center, Minn., developer of an implantable device that stimulates the sympathetic nervous system to suppress appetite, reduce hunger and trigger the burning of fat, for example.

Another device company, EnteroMedics Inc., of St. Paul, Minn., raised venture backing from MPM Capital LP and others before filing to go public in May. EnteroMedics is developing an implantable device that uses high-frequency, low-energy electrical impulses to intermittently block the vagus nerve, which controls much of the activity of the stomach, intestines and pancreas, and plays a role in food processing.

EnteroMedics's Maestro system, which uses this vagus-blocking approach, is designed to limit stomach expansion, reduce frequency of stomach contractions and produce a feeling of early and prolonged fullness, according to information in its registration statement.