UPDATE 2-XTL's diabetic pain drug fails in trial, shares sink

(Adds analyst's comments, updates share movement)

BANGALORE, Nov 18 (Reuters) - XTL Biopharmaceuticals Ltd XTLB.O said a mid-stage trial of its lead compound bicifadine, a treatment for diabetic neuropathic pain, failed to meet the main goal of the study, sending its shares tumbling 95 percent to a lifetime low on Tuesday.

"Bicifadine's was XTL's only product in clinical development, therefore we believe the company's current valuation should be based solely in cash," Ladenburg Thalmann & Co analyst Juan Sanchez wrote in a note to clients.

The company's current cash position is about $6 million but given the lack of prospects for the company XTL's shares should trade at a steep discount to cash, he said.

"We believe the product is likely to be discontinued," Sanchez, who downgraded the stock to "sell" from "buy," said.

The main goal of the trial was to compare the efficacy of two doses of bicifadine against a dummy drug in reducing pain associated with diabetic neuropathy, the company said.

Diabetic neuropathic pain, which manifests itself primarily in the feet, is a chronic condition resulting from damage to peripheral nerves.

XTL said the experimental drug also failed to meet the key secondary analysis.

"We will devote the next few days to further analyze the data and decide on the appropriate course of action for the Bicifadine program, and for the company," Chief Executive Ron Bentsur said in a statement.

Shares of the company were down $2.06 at 16 cents in morning trade on Nasdaq. They touched a life-low of 11 cents earlier in the session. (Reporting by Anand Basu in Bangalore; Editing by Amitha Rajan)