GI Dynamics (ASX:GID) said today that it plans to reduce its workforce by approximately 30% as part of restructuring efforts as it tries to extend its “cash runway.”
The Lexington, Mass.-based company said that following the reduction, it expects to have approximately 19 employees total. The reduction in personnel is expected to incur aggregate charges of approximately $250,000 for employee severance and benefits.
Charges for the reduction in workforce are expected to hit in the 2nd quarter ending June 30, this year, the company said in an SEC filing.
In March, GI Dynamics said it still plans to pursue FDA approval for its EndoBarrier weight loss device, despite missing safety and efficacy endpoints in a pivotal U.S. trial of the gut liner.
Lexington, Mass.-based GI Dynamics shut down the trial last July after the FDA ordered it to cease enrolling patients due to a higher-than-expected rate of hepatic abscess. The EndoBarrier is a plastic sleeve designed to promote weight loss and relieve the symptoms of diabetes by slowing the uptake of nutrients from food.
There were 7 cases of hepatic abscess in the 325-patient trial, for an incidence rate of roughly 3.5% – nearly double the 2% safety threshold and well above the 0.73% rate for patients outside the U.S. Today the company said that because the trial only enrolled about ⅔ of the 500 patients it was designed for, the sample size provides less statistical power.
Just yesterday, the company touted new safety and efficacy data on its EndoBarrier device designed for weight loss, claiming meaningful improvements in hemoglobin A1c levels and weight reduction in study participants.
Data from the study indicated that patients receiving EndoBarrier treatment along with liraglutide showed the largest benefit in both reduced hbA1c levels and weight loss, the Lexington, Mass.-based company said.