Micro-cap obesity device company GI Dynamics is restructuring by cutting 10% of its workforce, including its CFO, as well as reviewing its strategic options. The Australian company expects to communicate its next move "over the next several months," GI Dynamics' president and CEO, Michael Dale, said in a statement.
|The EndoBarrier gastric liner in place--Courtesy of GI Dynamics|
The move comes at a rocky time for the med tech company. It had to stop EU shipments of its EndoBarrier gastric liner in early October due at the request of European regulators; they resumed again in early December with little explanation from the company. However, its clinical trial activity was permitted to proceed during that period.
CFO Robert Crane is departing at an odd time for the company, given its capital raising ambitions. In late October, the Australian Stock Exchange-listed GI Dynamics applied for a dual listing on NASDAQ. If it's to pursue that route, an experienced CFO is essential, so any news of a replacement will make it clearer if the company is continuing in its pursuit of a U.S. stock exchange listing.
This year on the ASX, GI Dynamics has fallen more than 60% to hit a market cap of about $125 million. Its low share price would make it tough for the company to meet the minimum price requirements for a Nasdaq listing.
In addition to Crane's departure, the restructuring includes a 10% reduction of the GI Dynamics workforce, which it reported as totaling 67 employees at the end of 2013. Dale said that he and the board are working on a strategic plan that will allow the company to be fully capitalized going forward. The plan is expected to be announced in the next few months.
EndoBarrier is an endoscopically delivered gastric liner; it is in a pivotal U.S. trial. GI Dynamics CEO Dale joined in August. He previously headed up ATS Medical, which was acquired in 2010 by Medtronic ($MDT) for $370 million.
- here is the release