UPDATE 1-Spherix says diabetes drug effective, shares jump

Thu Oct 7, 2010 10:50am EDT

* Drug more effective in U.S than India population

* Data shows reduction in blood glucose level

* Shares up 56 pct

Oct 7 (Reuters) - Spherix Inc (SPEX.O) said additional data from a late-stage trial of its experimental Type 2 diabetes drug showed a significant reduction in blood glucose level, sending its shares up as much as 56 percent.

The company, which reported promising initial data from the drug Naturlose last November, said the drug was more effective in the U.S. population than in the Indian population.

Type 2 diabetes occurs when the body loses its ability to use insulin to convert food to fuel.

Naturlose prevents the stimulation of insulin secretion, avoiding beta cell exhaustion and naturally lowers blood glucose levels.

"We believe that further development in the Type 2 diabetes indication is merited, and we look forward to engaging a partner to continue this work," Chief Executive Claire Kruger said in a statement.

The company's shares, which have gained 7 percent since it signed a licensing agreement with University Of Kentucky Research Foundation, were up 30 percent at $1.75 Thursday morning on Nasdaq. They touched a high of $2.20 earlier in the session. (Reporting by Anand Basu in Bangalore; Editing by Aradhana Aravindan)

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