|The EndoBarrier in the intestine--Courtesy of GI Dynamics|
Lexington, MA's GI Dynamics is struggling to tread water following the termination of the pivotal trial of its endoscopically implanted device for obese patients with Type 2 diabetes. The company said it has enough money to last through 2016, but will need to raise additional funds to continue its operations after that.
It does not appear that the sales of its CE-marked EndoBarrier intestinal liner is selling well outside of the U.S., for the company reported a net loss of $35 million in 2015 on revenues of $1.3 million, according to an SEC filing. And the company had $21.7 million in total assets to start the year, down from $59.5 million at the end of 2014.
In June, the company fired its chief medical officer, Dr. David Maggs, "for cause," according to a regulatory filing. The move foreshadowed the termination of the pivotal trial due to 7 cases of hepatic abscess, a rate of about 3.5%. GI Dynamics said the rate ex-U.S., based on about 3,000 commercial units used since 2009, is only 0.73%.
In August the company laid off 25 employees, or about half its staff, in a bid to save cash.
In its latest SEC filing, GI Dynamics wrote that it does have enough cash to seek FDA approval or develop an improved version of the devices. "The Company may seek to raise additional funds through any combination of collaborative arrangements, strategic alliances, and additional equity and debt financings or from other sources. There can be no assurance that any such financing opportunities will be available on acceptable terms, if at all," the filing states.
Still, companies big and small remain interested in pursuing alternatives to insulin for treating Type 2 devices. "It's well known right now that if you do some of these surgeries for obesity, whether it's a gastric bypass procedure or sleeve gastrectomy, that patients have an immediate normalization of blood glucose and that persists. So we're looking at other approaches beyond just the big operations to potentially have a companion to some of the drugs that are coming on board, particularly for Type 2 diabetes," the chief medical officer of Johnson & Johnson's device unit, Dr. Bruce Rosengard, told FierceMedicalDevices in a previous interview.
And Johns Hopkins University spinout Glyscend is in the early stages of developing an orally ingestible intestinal coating that prevents stimulation of duodenal mucosa. It aims to emulate the efficacy of the EndoBarrier while reducing the risks due to its less invasive approach.
- read the SEC filing