GI Dynamics shuts down U.S. EndoBarrier trial

A too-high rate of liver infections forced the halt of a U.S. clinical trial for the EndoBarrier weight loss device made by GI Dynamics (ASX:GID), the company said today.

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 last month, 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.”

“The company concluded that terminating the Endo trial, effective immediately, is in the best interest of all stakeholders to help ensure adequate resources to further the development of EndoBarrier for its current use and potential new indications, and to continue developing other markets for EndoBarrier therapy. Consistent with the company’s decision, the Endo Trial’s independent data safety & monitoring board has likewise recommended stopping the Endo trial,” GI Dynamics said.

A review of the Endo trial results is coming “in the very near future,” the company said. A preliminary review showed a greater-than-90% probability that the study would meet its efficacy endpoint, as measured by reduction of HbA1c blood sugar levels, GI Dynamics said.

“Consistent with the decision to conclude the Endo trial, we will immediately begin explanting the device from all remaining Endo trial participants and closing out the Endo trial – a process we believe will take several months to complete – while simultaneously initiating efforts to restructure our business and costs to ensure sufficient cash remains to establish new priorities, continue limited market development and research, and evaluate strategic options,” president & CEO Michael Dale said in prepared remarks. “We know that our decision to terminate the Endo trial will be a major disappointment to our patients and the clinicians who have supported the Endo trial, as well as our investors, but we believe that this is the responsible decision to take in the interests of all stakeholders.”

GI Dynamics won FDA approval for the Endo trial in October 2012.

The Australian Stock Exchange suspended trading in GID shares July 29, until tomorrow morning. The stock, which closed at 30¢ Australian before the enrollment halt, plunged to 15¢A apiece on the news. The stock was trading at 14¢A when ASX suspended trading July 28.

The company also reported its preliminary sales and profit numbers, saying that it managed to pare its losses by 17.1%, to -$10.2 million, despite a -62.5% sales slide to $300,ooo for the 3 months ended June 30,

GI Dynamics said it’s due to release its full 2nd-quarter results August 14, but will discuss the results tonight during a conference call with investors.

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