UPDATE 2-Depomed's hot flashes drug data disappoints, shrs dive

* Says drug met 9 of 16 goals in Breeze 1 & 2 trials

* Co to meet FDA in December

* Shares down 40 pct

(Recasts; adds details from conference call, analyst comment, updates share movement)

By Anuradha Ramanathan

BANGALORE, Oct 12 (Reuters) - Depomed Inc's (DEPO.O) experimental drug to treat menopausal hot flashes showed disappointing results in two late-stage trials, sending its shares down 40 percent.

The company said the Breeze 1 and 2 trials, which were testing the drug Serada at two doses, met only nine of the 16 co-primary goals after four and 12 weeks as there was an unexpectedly high placebo effect.

"The frequency of hot flashes in the placebo arm of Breeze 1 dropped to 62 percent, which is 10 percent to 15 percent higher-than-expected," Michael Sweeny, vice president of research and development at the company said in a conference call.

The primary goals of the studies were to achieve a statistically significant reduction in the frequency and severity of menopausal hot flashes compared to the dummy drug after four weeks and 12 weeks of treatment.

The company said at four weeks, the higher dose treatment arm of 1800 milligrams per day of the drug met all four co-primary endpoints, while the lower dose arm of 1200 mg a day met three of the four endpoints.

Only one main goal out of four was met in the 1800 mg dosage as well as the 1200 mg dose at 12 weeks, the company said.

"Clearly this is a disappointment, as the trials were within a hair's breadth of success," Merriman Curhan Ford's Michael King said in his note to clients.

King, who cut his price target to $7-$8 from $10-$13 on the company's stock, said Serada's positive effect at four weeks was eroded by the continued improvement in the trial arm with the dummy drug.

In the conference call, Chief Executive Carl Pelzel said the company would meet the U.S. Food and Drug Administration in December to discuss the results, the path to approval and any additional clinical work that may be required.

Pelzel said that the company, which had spent about $15 million over two years for the two studies, has the resources to conduct the same trials, if necessary.

As of June 30, the company had cash, cash equivalents and marketable securities of about $84 million.

Depomed shares, which had gained 41 percent last week after the company's pain drug met the main goal of a late-stage trial, fell as much as 40 percent on Monday. They were down $2.39 at $3.97 in Monday afternoon trade on Nasdaq.

(Reporting by Anuradha Ramanathan in Bangalore; Editing by Deepak Kannan and Aradhana Aravindan)