Embattled GI Dynamics has been relatively quiet lately, but the Boston-based company recently revealed its shareholders had approved an offering worth a total of $2 million. The company held a special meeting February 27 to discuss the placement, according to a release.
Could the offering help GI Dynamics continue to develop its EndoBarrier device – a technology designed to treat obesity in patients with Type 2 diabetes, that has come under fire in the past?
The device works by creating a barrier between food and the wall of the small intestine and thereby changes metabolic pathways by controlling how food moves through the digestive system. The effects are supposed to be similar to gastric bypass surgery, but without the surgical procedure and hospital stay.
The idea behind the device is that preventing food from coming into contact with the intestinal wall may alter the activation of hormonal signals that originate in the intestine, thus mimicking the effects of a Roux-en-Y gastric bypass procedure without surgery.
To say GI Dynamics has faced setbacks and hurdles with the EndoBarrier would be an understatement. The most recent roadblock with the device came in November of last year when the company said it had received notification from its notified body SGS United Kingdom, Limited (SGS) that its CE mark was withdrawn.
In May of last year, the company had its CE mark suspended. The company lost European approval because it needed to address nonconformance issues related to its quality management system.
The company received CE mark in 2009. Prior to losing its CE mark, FDA halted the company’s U.S. pivotal ENDO trial after four cases of hepatic abscess were found among the 325 patients enrolled in the trial. Hepatic abscess is a bacterial infection of the liver that needs immediate treatment.
GI Dynamics reduced its headcount by 48% to 36 in 2015 after the U.S. trial was halted.
If GI Dynamics manages to straighten out the issues with the EndoBarrier and get regulatory approvals for the device, then it might find the market has changed substantially. For the longest time, the gold standard of dealing with morbid obesity has been bariatric surgery, where the stomach anatomy is altered to limit the amount of food a person can eat at a time. However, more companies are coming up with different alternatives to treat obesity and in some cases Type 2 Diabetes.
Recently, Pure Tech Health’s Gelesis affiliate said it had completed a $30 million financing round to help develop its a new weight loss therapy. The Gelesis100 is non-systemic and administered orally in capsules containing small hydrogel particles.
The capsules are taken with water prior to a meal, after which the small hydrogel particles are released from the capsules in the stomach and rapidly absorb water, hydrating to about 100 times their original size, inducing satiety, reducing hunger, and causing weight loss.
Reshape Lifesciences, formerly known as EnteroMedics moved to strengthen its position in the space when it acquired Bariosurg last year. Lake Forest, CA-based Barisurg has developing the Gastric Vest, a device that wraps around the stomach and mimics conventional weight loss surgery.
Prior to the acquisition, Reshape Lifesciences had received approval for a neuromodulation therapy - called VBloc - works by tricking the brain into thinking that the person is not hungry. It does so by blocking those signals to and from the vagus nerve.
Dublin-based Medtronic made its way into the market when it introduced the Gastrisail, an FDA-cleared device designed to improve the consistency and efficiency of sleeve gastrectomy procedures in 2015. Medtronic inherited the company through its $43 billion Covidien acquisition.