GI Dynamics, embattled producer of the EndoBarrier device for treatment of obesity and type 2 diabetes, has performed a reverse split of its stock, to the tune of 10:1. Shares that were trading at A14c are consequently now A$1.40.
Search EndoBarrier on our site and you’ll find a story of much promise, matched by much trouble. Since its launch a coupe of years ago the company has seen the product delivering what looked like a successful clinical outcome, only for things to start mitigating against the Australian-traded Israel-based company. Late in 2014 the company’s EU Notified Body ordered the suspension of shipments pending what was referred to as a review of its vigilance and reporting systems. The device was allowed back onto the market in early December with tighter indications, a situation likely to compound a picture of already falling sales. The days afterwards saw staff reduced by 10% and the axe falling at senior management level, including the departure of the CFO. And then the US trial of EndoBarrier was suspended in the light of a higher than anticipated rate of hepatic abscess. That event saw the temporary suspension of share trading on the Australian Stock Market. The share price then dropped to its A14c level, some 15% of what it was worth only eighteen months ago.
Fast forward to now and what looks like a blunt attempt to get the ball rolling again, although the reverse split was actually approved last November, before much of the real trouble hit the headlines. The company is also trying to gain a listing on the NASDAQ exchange.
Source: US Security and Exchange Commission