Gi Dynamics investors sign the divorce papers
Health & Biotech
Health & Biotech
Gi Dynamics’ (ASX:GID) handful of remaining shareholders wiped a tear away yesterday and voted to send the company home to America, after almost a decade of disappointment on the ASX.
The stock fell another 12.5 per cent to 0.35c.
In May, the anti-obesity company said it wanted to delist.
It was having trouble raising money. Its shareholders — Crystal Amber Fund from the UK and Richard Cashin hold 88 per cent of the company — were tired of underperformance on the Australian bourse.
And it’d found some investors who would invest but only if it was no longer an ASX company.
The Boston company, which has stock traded on over-the-counter markets in the US, will disappear from Australia on July 22.
Gi Dynamics listed in 2011 with a promise to use a quarter of the $80m raised from Australian investors to commercialise a new alternative to bariatric surgery: a sleeve that would sit inside the intestine and act as a barrier to food absorption for that section of the gut.
It was approved for sale in Europe and Australia and a trial was being set up in the US that would hopefully open the biggest medical device market in the world up to the EndoBarrier.
The data at the time suggested that shortening the tract of gut that could absorb food would assist with obesity and allow people with type-2 diabetes to bring their weight and glucose levels under control.
The money slowly started rolling in from sales, but problems began to emerge in 2014 when the EU stopped all shipments.
The company said it was a compliance issue and shipments began again two months later, but with a caveat: the company was now only allowed to narrow the band of people who could use the device based on.
The Jaws music did not stop, however. In March 2015, a US clinical trial was put on hold after seven patients suffered bacterial infections in their liver.
‘Hepatic abscess’ was a known event related to the use of EndoBarrier, but cases in the trial were higher than expected.
By July the company had called off the trial after not being able to satisfy the US regulator it was safe. The following year the Australian regulator cancelled its sales registration followed by Europe in 2017.
It was the end of the line for a stock that had been slipping since early 2014, with the stock falling from 83c in January 2014 to 0.35c today.
It was back to square one in 2018 with a struggle to find funding and an application for a new US clinical trial, as the company continued to point to small studies that suggested that despite the risks, the data showed it worked in reducing weight and the scale of type-2 diabetes.
But the company is now a clinical stage research company, not the revenue-generating device seller promised back in 2001.
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