(UPDATED: See below.)

(NOTE: This item was originally published as part of today’s life-sciences briefing.)

EnteroMedics, a St. Paul, Minn., device maker working on a neuromodulation implant for treating obesity, slashed its expected IPO pricing by half, lowering it to a range of $8 to $9 instead of its earlier estimate of $14 to $16. The company’s latest SEC fliing is here; under the new terms, EnteroMedics can raise at most $51.8 million, down from the $92 million it had previously planned on.

Needless to say, this sort of thing is never a good sign, particularly for a company whose potentially transformative technology still lacks convincing evidence that it really works. The EnteroMedics device, which it calls Maestro, is still in late-stage clinical trials in Australia, Mexico, Norway and Switzerland, but isn’t terribly far along yet. The company says it has so far implanted the Maestro device in 76 patients, of which it has followed 11 for a full year. Its “pivotal” late stage trial, however, only began in the third quarter and will involve 220 patients, all of whom will have the device implanted, although only 145 or so will have it turned on. In fact, EnteroMedics wants to expand the trial to 300 patients.

When EnteroMedics initially filed for its IPO, it wasn’t very clear about exactly how the VBLOC “neuroblocking” technology in the Maestro is supposed to work. In subsequent months it has launched a Web site and added diagrams (see, for instance, the thumbnail image at left; click it for a larger version) and other information to its filings in order to explain the technique in more detail.

EnteroMedics now describes Maestro as a device that uses short electrical pulses to interfere with signals along the vagus nerve, in turn — and in theory — limiting stomach expansion, reducing the intensity and frequence of stomach contractions and inducing feelings of fullness. The device involves an implanted, radio-controlled “neuroregulator” whose electrodes extend to the vagus nerve near the junction of the stomach and the esophagus. A separate external unit controls the pulse frequency and wirelessly recharges the neuroregulator.

Given the severity of the obesity “epidemic” and the desperation of many overweight people, you’d think investors would be falling all over themselves to invest in a technology like VBLOC, which — again, in theory — offers the advantages of gastric-bypass surgery with a much less invasive procedure. The obvious drawback, of course, is the possibility that the device doesn’t work or, worse, that it might actually harm patients. EnteroMedics says it has observed seven adverse events to date, but adds that all were resolved without surgery or permanent effects.

Of course, it doesn’t help that the experimental evidence that this sort of technique should work is in relatively short supply. EnteroMedics itself notes that severing the vagus nerve, or vagotomy, used to be a common treatment for ulcers, after which many patients temporarily absorbed fewer calories from fat, lost weight and had decreased appetite. VBLOC attempts to mimic these effects of vagotomy without blocking all signals, yet EnteroMedics cites no studies to suggest that the technique works, and doesn’t appear to have published any of its research to date in patient studies.

EnteroMedics, of course, isn’t the only startup to see investors turn up their noses during a roadshow. About a month ago, the adult stem-cell company Bioheart also halved its IPO terms, and hasn’t yet managed to get its offering off the ground. (See our recent coverage here and here.) Like EnteroMedics, Bioheart is pushing ahead with a risky, largely unproven technology that’s only tenuously grounded in hard scientific findings. Perhaps it’s no wonder that investors are starting to get cold feet in both cases now that they’re finally getting a better look at these companies’ underpinnings. Or maybe it’s just one more sign — as if we needed it — that risk of any sort, particularly given the subprime-mortgage meltdown, is increasingly out of favor.

UPDATE: EnteroMedics went public later in the day at a price of $8 a share, limiting the company’s maximum IPO take to $46 million. That’s better than a poke in the eye with a sharp stick, but generally speaking, still not so hot.

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