GI Dynamics announces $10m in financing

GI Dynamics (ASX:GID) announced yesterday that it agreed to terms of a financing of up to approximately $10 million with Crystal Amber (GBX:CRS) to continue developing its EndoBarrier device.

EndoBarrier is a plastic sleeve designed treat Type 2 diabetes and obesity by preventing the absorption of nutrients from food as it exits the stomach and enters the intestinal tract.

Boston-based GI Dynamics won approval to launch a pivotal trial for the EndoBarrier in February. The device, under investigational device exemption by the FDA, is entering concurrent pivotal trials in the U.S. and India.

GI Dynamics expects the funding to go toward clinical trial enrollment in the U.S. and India, as well as a CE Mark for commercialization in Europe and select countries in the Middle East, according to a release. It’s enough to see the company through to March 2020; GI Dynamics said it’s evaluating longer-term fundraising options.

The U.S. trial, called Step-1, is currently enrolling patients with target enrollment completion during the first quarter of 2020. Enrollment initiation for the trial in India, called I-Step, is slated for Q4 2019 with completion during Q2 2020. The company said it plans to complete the CE Mark process by the first quarter of 2020.

“We are pleased to report that Crystal Amber has committed to this substantial financing,” GI Dynamics president & CEO Scott Schorer said in prepared remarks. “We have diligently prepared for the commencement of patient enrollment for the Step-1 pivotal trial in the U.S., patient enrollment for the I-Step trial in India in partnership with Apollo Sugar, and have continued to work towards securing our CE Mark. This financing provides us with adequate working capital to push these programs forward with all possible diligence. We are working to provide EndoBarrier to the millions of patients severely affected by Type 2 diabetes, obesity, [non-alcoholic fatty liver disease], [nonalcoholic steatohepatitis], chronic kidney disease and other associated metabolic disorders.”