UPDATE 1-Array's diabetes drug meets goal in early-stage trial

* Says early stage diabetes drug meets trial goal

* Q4 loss/shr 55 cents vs est loss/shr 55 cents

* Shares up 7 pct

Aug 10 (Reuters) - Array BioPharma Inc (ARRY.O) said an early-stage trial of its experimental diabetes drug met the main goal of the study and that its quarterly loss was in line with market estimates.

The drug, codenamed ARRY-403, was tested in 41 patients with Type 2 diabetes, who received either single doses of the drug ranging from 25 mg to 400 mg, or a dummy drug.

The drug met its primary and secondary goals of safety, pharmacokinetics and glucose control, the company said.

Array, which focuses on cancer, inflammatory and metabolic diseases, said it was initiating a study in Type 2 diabetes patients to evaluate safety, exposure and glucose control of the drug over a 10-day period.

"Based on the pharmacokinetic and safety profile, coupled with effective glucose control, we believe ARRY-403 has the potential to be a first-line therapy with once-a-day dosing," Chief Scientific Officer Kevin Koch said in a statement.

Type 2 diabetes occurs when the body loses its ability to use insulin to convert food to fuel. It is often linked with obesity, poor diet and lack of exercise.

In a separate statement, Array posted a fourth-quarter net loss of $26.7 million, or 55 cents a share, compared with a net loss of $32.4 million, or 68 cents a share, a year ago.

Total revenue fell 10 percent to $5.5 million.

The company also said that it discontinued the enrollment of new patients in the clinical trial of ARRY-797 in ankylosing spondylitis, but did not disclose other details.

Shares of the company rose 7 percent to $4.75 in after market trade. They closed at $4.45 Monday on Nasdaq. (Reporting by Esha Dey in Bangalore; Editing by Anil D'Silva)