CORRECTED-UPDATE 1-Tranzyme to explore sale of company

(Corrects paragraph 4 to say drug was in mid-stage trials, not late stage)

Feb 8 (Reuters) - Drugmaker Tranzyme Inc said it will explore a possible sale of the company, less than two years after it went public and shortly after it stopped trials of one of its most advanced drug in development.

The company retained Stifel as financial adviser for a strategic review, and said it has not made a decision to pursue any specific transaction.

Tranzyme shares last traded at 56 cents, down 86 percent since it went public in April 2011 at $4 per share, leaving it with a market value of $15 million.

The drug for stomach paralysis, a condition known as gastroparesis, was being tested in two mid-stage trials - one with a dosage of three times a day and the other with a daily dosage. Both trials were dropped due to lack of efficacy.

The company has two other drugs in early testing. (Reporting by Esha Dey and Vrinda Manocha in Bangalore; Editing by Supriya Kurane)