|GI Dynamics has raised about $52.2 million to fund a pivotal trial of EndoBarrier.--Courtesy of GI Dynamics|
GI Dynamics ($GID) has pulled in about $52.2 million through a private placement, funds the company will use to get its obesity-treating implant through a pivotal trial on the path to U.S. approval.
The company has sold about 108.5 million depository interests at 48 cents apiece to investors in the U.S. and Australia, and GI Dynamics has its eye on raising another $2.3 million by offering notes to shareholders at the same rate.
Most of that cash will go toward an ongoing pivotal study of EndoBarrier, the company's endoscopically implanted device that fights obesity and the effects of Type 2 diabetes. GI Dynamics is in the midst of the ENDO trial, studying EndoBarrier's safety and effectiveness in 500 obese diabetics, and the company's banner device is advancing ahead of schedule, CEO Stuart Randle said.
"With the FDA's approval last year to allow us to move forward with a pivotal trial in the United States rather than a pilot trial, our clinical investment needs increased," Randle said in a statement. "This financing allows us to fully and rapidly resource our pivotal trial in the United States while continuing to expand our commercial footprint and sales ramp in Europe, Australia, South America and the Middle East and build the case for reimbursement in key markets."
The company expects to file with the FDA by 2015, Randle has said, and, in the meantime, GI Dynamics is at work convincing payers and providers abroad of EndoBarrier's benefits. Last month, France's Ministry of Social Affairs and Health agreed to pay about $1.5 million to fund a 174-patient study of the device, looking to demonstrate EndoBarrier's cost-effectiveness and woo decisionmakers to add it to their reimbursement lists.
The implant has been CE marked since 2010, and, in previous trials, EndoBarrier dramatically reduced blood sugar levels in diabetics, with patients charting an average 20% weight loss in the first year after implantation.
- read the announcement