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| The EndoBarrier in the intestine--Courtesy of GI Dynamics |
One of a handful of obesity devices aiming for the U.S. market has been sidelined. Australian company GI Dynamics has opted, after discussions with the FDA, to terminate its pivotal trial for its EndoBarrier due to safety concerns. The trial had already been placed on hold by the agency in March due to the incidence of hepatic abscess.
This news follows the first two FDA approvals for obesity devices in more than a decade, which already came through this year for an implantable neurostimulation device from EnteroMedics ($ETRM) in January and for a minimally invasive balloon-based option from ReShape Medical earlier this week. ReShape was a Fierce 15 pick last year; it told FierceMedicalDevices then that it would reevaluate its status as a private company after an FDA approval, suggesting that an IPO filing could be in the cards for it soon.
Also this week, another obesity company put its device in front of the agency. Aspire Bariatrics submitted a PMA application for its hand-held device that enables obese patients to drain a portion of consumed food from the stomach directly into the toilet via a small port.
For its part, GI Dynamics seems to be abandoning its efforts in the U.S. market. It will begin removing the EndoBarrier device immediately from existing patients in the ENDO pivotal U.S. clinical trial, a process that will take several months. GI Dynamics expects to restructure at the same time and shift its cash to new priorities.
The company is holding a conference call later today to detail its corporate strategy moving forward. It has already shed nearly all its value and has a market cap of only $64 million. At the end of last quarter, it reported having $40 million in cash.
There were 7 cases of hepatic abscess in the ENDO trial, a rate of about 3.5%. That exceeded a previously established safety threshold of 2%. The rate ex-U.S., based on about 3,000 commercial units used since 2009, is only 0.73%. The company said it will conduct a detailed review of the trial, but it expects that the trial endpoint of reduction of HbA1c blood sugar levels in obese, diabetic patients was exceeded. The EndoBarrier is a gastric liner that is inserted into the stomach endoscopically and is to be used for a maximum of 12 months.
"We know that our decision to terminate the ENDO trial will be a major disappointment to our patients and the clinicians who have supported the ENDO trial, as well as our investors, but we believe that this is the responsible decision to take in the interests of all stakeholders," said the company's president and CEO, Michael Dale, in a statement.
- here are the GI Dynamics and the Aspire Bariatrics releases
Special Report: FierceMedicalDevices' 2014 Fierce 15 - ReShape Medical