Crystal Amber has announced that it has acquired a further 16.08 per cent. of the issued Chess Depositary Interests (“CDI”) in GI Dynamics Inc (“GI Dynamics”), taking the Fund’s CDI holding in the company to 38.73 per cent.
GI Dynamics is the developer of EndoBarrier, the first minimally invasive device therapy approved for the treatment of type 2 diabetes and obesity. EndoBarrier is a temporary bypass sleeve that is endoscopically delivered to the duodenal intestine, offering similar effects to the surgical gastric bypass. It is CE mark approved and commercially available in Europe and a number of countries outside of the United States.
Founded in 2003, GI Dynamics is headquartered in Boston, Massachusetts. It listed in September 2011 on the Australian Stock Exchange, with a share price of AUS1.10 and market capitalisation of AUS300 million. Following what the Fund considers to be several operational failures by previous management, including a terminated FDA trial, GI Dynamics’ share price currently stands at 2.8c, valuing the company at AUS15.5 million, approximately GBP9.5 million. Shareholders since listing include Johnson & Johnson and Medtronic Inc.
Since launch, the EndoBarrier therapy has been used in over 3,500 patients worldwide. Multiple independent studies support its safety and efficacy in reducing weight, HbA1c (blood glucose) levels and the need for insulin and other prescribed medications. EndoBarrier stands as a minimally invasive alternative to bariatric surgery and pharmacotherapy, which have well documented side effects and safety issues. The wide prevalence of type 2 diabetes and obesity present a potentially vast market opportunity expected to reach 355 million patients in 2030.
The Fund supports the current management’s strategy to commercialise the device in Europe, initiate a new FDA trial and continue to gather clinical data. This would build on 2016’s successes, including the 300 patient UK trials led by the Association of British Clinical Diabetologists (“ABCD”) and the data announced from the German registry, which included 243 patients. The company has achieved partial reimbursement in Germany (NUB status 1) and Israel and has received preliminary reimbursement codes in Holland and Switzerland.
The Fund believes that GI Dynamics has a world class technology, addressing an unmet clinical need, with its current share price a function of shareholder disillusionment resulting from past management disappointments.
The Fund, in conjunction with its Investment Adviser, now looks forward to working with the GI Dynamics board to fully capitalise on what the Fund believes is GI Dynamics’ highly scalable potential.
CRS : Crystal Amber ups stake in GI Dynamics