GI Dynamics Stock Freefalls After FDA Halts Trial
Published: Mar 09, 2015
March 6, 2015
By Jessica Wilson, BioSpace.com Breaking News Staff
GI Dynamics, an Australian medical device company, announced today that the U.S. Food and Drug Administration (FDA) has placed a hold on enrollment in the company’s U.S. clinical trial of its EndoBarrier Therapy (the ENDO Trial).
News broke yesterday that the Australian Securities Exchange had granted GI Dynamics a trading hold, freezing the share price at 30 cents in preparation for the announcement of a “material event.” The hold would be in place “until the commencement of trading on Monday, or until an earlier announcement of the material event is made,” reported the Motley Fool Australia.
Once the announcement about the FDA’s decision was made, the aforementioned “material event,” trading re-commenced and share prices of the company fell more than 60 percent to 12 cents AUD per share. The share price is at 15 cents AUD, as of 11:32 am EST.
The halted ENDO trial involves 325 subjects using an EndoBarrier medical device. The device is a thin plastic sleeve worn inside the body that prevents food digestion in the upper part of the small intestine. The medical device is meant to treat type 2 diabetes and obesity.
“The decision to hold [or halt] further enrollment results from four cases of a bacterial infection of the liver, known as hepatic abscess, among the 325 subjects currently enrolled in the ENDO Trial,” the company said in a statement. In the past, hepatic abscesses have presented in patients who use the EndoBarrier, but they have “recently presented at a higher than anticipated rate in the ENDO Trial.” The FDA has requested additional information on the risk/benefit profile of the medical device.
GI Dynamics also claimed that the risk/benefit profile established in the patients currently using the medical device, which is already approved in multiple countries outside the U.S., “remains favorable.” The incidence rate of hepatic abscess is 1% based on 2,900 units shipped commercially outside the U.S. since 2009.
GI Dynamics, however, has had problems with the EndoBarrier outside the U.S. as well. In October 2014, the European Union temporarily suspended commercial product shipments of the EndoBarrier pending a review of the company’s vigilance and reporting systems.
At the time of the announcement, President and Chief Executive Officer Michael Dale stated that though the company was “working diligently” to rectify the problem, he did not expect a resolution before the end of October 2014.
He was correct. The company was not cleared to resume commercial product shipments of the EndoBarrier device until December 2014.
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