It’s been an uncomfortable few months for Israeli company GI Dynamics, purveyor of the EndoBarrier® device for treating obesity and type 2 diabetes. Now the company’s pivotal trial has been suspended by the FDA because of a higher than anticipated incidence of hepatic abscess.
Background
Visitors to our site will probably be familiar with the EndoBarrier product, an insertable sleeve that sits inside the appropriate section of the GI tract and in so doing reduces absorption of the things that are associated with obesity and type 2 diabetes.
Back in the middle of 2014 things were looking promising for the device as the therapy became more widely used and people started to theorise about its mode of action. Eighteen months earlier GI Dynamics had announced the launch of its pivotal ENDO trial that was to take place in up to 25 U.S. hospitals and involve about 500 people. This is the trial that has now been suspended, the reason being that four of 325 cases so far enrolled had reported hepatic abscess, a known complication of the treatment, but one thought to occur in a rather lower percentage of patients (estimated at 1%). The FDA has suspended the study until further information is forthcoming, which must be pretty galling for GI Dynamics, as 4/325 is only one patient more than they’d have expected.
Tellingly the product remains on sale in countries where it is approved for sale, but the news of the trial’s suspension is something of a case of piling bad news on bad. Late last year the company saw EU sales temporarily suspended while it sorted out a vigilance/reporting issue. This accompanied news of lower sales and a consequent fall in its share price. Then it was announced that the CFO was to depart, a separation details of which were concluded in February. Then the company’s year end financials were issued, showing sales increasing modestly over prior year, but losses ramping to $48 million, compared with $35 million a year earlier….rather a large number on annual revenue of $2.8 million.
So, bang up to date, it transpires that the company has requested that its listing on the Australian stock market be suspended in view of a material event, which we’re taking to refer to the ENDO trial suspension.
It seems the stock might be back on the market by Monday.