GI Dynamics (ASX:GID) yesterday said it will slash its workforce by 46% by the end of the year, cutting about 25 jobs, after a too-high rate of liver infections forced the halt of a U.S. clinical trial for its EndoBarrier weight loss device.
The Lexington, Mass.-based firm said it was making the cuts to cover the cost of shutting down the trial and to make sure it has enough cash “to ensure sufficient cash remains available to establish new priorities, continue limited market development and research, and to evaluate strategic options.”
After the cuts are implemented GI Dynamics said it expects to have roughly 29 full-time workers. The cuts are expected to cost $600,000, with about $500,000 of that coming in the 3rd quarter, the company said.
Lexington, Mass.-based GI Dynamics said March 5 that the FDA halted enrollment in the 325-patient Endo trial after some patients developed bacterial infections known as hepatic abscesses. Today the company said it would explant all patients in the trial over the next few months as it halts the trial, after it couldn’t come to an agreement with the FDA about continuing the study.
GI Dynamics, which sacked chief medical officer Dr. David Maggs for cause in June, said there were 7 cases of hepatic abscess in the trial, for an incidence rate of roughly 3.5%. That’s nearly double the 2% safety threshold, the company said, noting that the rate outside the U.S. is about 0.73% “based on experience with approximately 3,000 units shipped commercially since 2009.”