GI Dynamics Release: Appendix 4C Quarterly Report Quarter Ended 30 June 2012
Published: Jul 30, 2012
During the Quarter, the Company continued to build upon its achievements earlier this year and advance commercialization of its flagship product, EndoBarrier®, a novel, non-surgical device proven to lower blood glucose levels and promote weight loss in type 2 diabetic and/or obese patients while implanted.
The Company’s major corporate and commercial achievements over the last several months were:
• expanded access to EndoBarrier Therapy in a number of countries, bringing the total number of commercial centers to 16 facilities globally, including:
o Europe – established new commercial centers at the University Hospital Schleswig-Holstein, Campus Lübeck in Germany and the University Hospital Lille Hôpital Claude Huriez in France (where the first patients treated with EndoBarrier Therapy will be part of a pilot trial);
o South America – designated Red Salud UC as a Center of Excellence and established new commercial centers at Clinica Indisa and Clinica Reñaca in Chile;
o Australia – established a new commercial center at the Epworth Centre for Bariatric Surgery;
• continued to progress toward reimbursement in all of our key markets and in particular, local reimbursement in The Netherlands and national reimbursement in Germany;
• secured regulatory approval for EndoBarrier Therapy in New Zealand and Israel;
• initiated patient-focused EndoBarrier marketing campaigns in support of national diabetes awareness efforts in both the U.K. (Diabetes Disease Week in June) and Australia (National Diabetes Week in July);
• worked with local centers on marketing campaign and, as a focal point of their EndoBarrier Therapy marketing efforts, multiple commercial centers launched EndoBarrier-dedicated websites to support patient awareness and recruitment;
• presented positive data on EndoBarrier Therapy at multiple medical/scientific conferences including an interim report from a six-month randomized controlled multi-center trial on diabetics, results from a lower BMI trial in diabetics, results showing successful re-implantation in patients who had previously been implanted for one year and a live course on how to implant the EndoBarrier. These presentations occurred at annual physician meetings including the American Society for Metabolic & Bariatric Surgery (ASMBS), The American Diabetes Association (ADA), Digestive Disease Week (DDW) and International Federation for the Surgery of Obesity and Metabolic Disorders (IFSO);
• published data evaluating efficacy and safety of EndoBarrier Therapy in Annals of Surgery; and
• held the first global Commercial Users Meeting with more than 40 EndoBarrier doctors and other professionals from seven countries including from Europe, South America and Australia.
In addition to these achievements, last week, a pre-trial conference set the start of a trial in the litigation with W.L. Gore as January 2013.
As set out in the attached Appendix 4C, the Company’s key financial results were:
• the Company had approximately US$55.4 million of cash and cash equivalents at the end of the Quarter of which approximately US$16.4 million was in Australian dollars as of 30 June 2012;
• the Company’s cash and cash equivalents were reduced by approximately US$7.2 million in the Quarter and by approximately US$10.8 million for the six months ended 30 June 2012 while cash and cash equivalents used in operations was approximately US$7.0 million in the Quarter and approximately US$12.4 million for the six months ended 30 June 2012;
• the Company recorded revenue of approximately US$0.1 million in the Quarter and approximately US$0.2 million for the six months ended 30 June 2012 related to the early stages of EndoBarrier Therapy commercialization. The Company also had deferred revenue of approximately US$0.4 million as of 30 June 2012;
• during the Quarter, the Company’s key payments were for employee costs of approximately US$2.2 million, research and development of approximately US$1.6 million and sales and marketing of approximately US$1.2 million which were attributable to the Company’s expanding commercialization efforts in support of EndoBarrier Therapy, as well as ongoing clinical trials. The corresponding key payments for the six months ended 30 June 2012 were approximately US$4.6 million for employee costs, approximately US$3.2 million for research and development and approximately US$2.3 million for sales and marketing; and
• during the Quarter, the Australian dollar depreciated from US$1.04 on 31 March 2012 to US$1.02 on 30 June 2012. This depreciation resulted in an unrealized foreign exchange loss of approximately US$0.3 million. During the six months ended 30 June 2012 the Company sold Australian dollars that resulted in a foreign exchange gain of approximately US$1.5 million.
Looking Ahead to the Second Half of 2012
GI Dynamics’ strategy for the second half of 2012 is to focus on increasing utilization at its centers in Europe, South America and Australia and planning commercial expansion into additional countries. A focus will be placed on receiving local reimbursement and collecting the data for national reimbursement.
In the United States, the Company is engaged in conversations with the U.S. Food & Drug Administration (FDA) to further define its U.S. clinical program. Following the conclusion of these conversations, the Company expects to begin a clinical study of EndoBarrier Therapy later this year.
“We are pleased with the solid foundation we are building in Europe, South America and Australia in support of our commercial strategy for EndoBarrier Therapy,” stated Stuart A. Randle, president and chief executive officer of GI Dynamics. “Our goal is to establish approximately 30 commercial centers by the end of 2012, and with 16 centers now in place, we are on track to achieve this goal.”
Mr. Randle continued, “As we’ve said from the very beginning, we are developing a market for a transformative therapy that addresses two of the world’s most significant health crises – type 2 diabetes and obesity. We are seeing the right signs in the marketplace and with payors that EndoBarrier is gaining traction. As the use of EndoBarrier grows, we are inspired by the tremendous impact our product is having on the health, activities of daily living and overall well being of patients around the globe.”
CONFERENCE CALL & WEBCAST INFORMATION
GI Dynamics will host a briefing call and live audio webcast to discuss the Company’s financial results for the second quarter and six months ended 30 June 2012 and its business outlook. Stuart Randle, president and chief executive officer, will host the call with Robert Crane, chief financial officer, and Mark Twyman, chief commercial officer.
Monday, August 6, 2012 at 6 p.m. U.S. EDT / Tuesday, 6 August 2012 at 8 a.m. AEST
LIVE U.S. CALL-IN: 1-888-679-8018
LIVE AUSTRALIA CALL-IN: 1-800-729-868
LIVE INTERNATIONAL CALL-IN: +1-617-213-4845
PASSCODE FOR CALL-IN NUMBERS: 50861352
THE WEBCAST CAN BE DIRECTLY ACCESSED AT: http://www.media-server.com/m/acs/6ac46f3a637553099c2cacc84e186fe1.
A REPLAY OF THE WEBCAST WILL BE AVAILABLE ON THE COMPANY’S WEBSITE FOR 30 DAYS FROM THE DATE OF THIS CALL: investor.gidynamics.com