The Lexington, Mass.-based device company is making available some 72.7 million chess depository interests at a price of A$1.10 per CDIs, a type of security used by the Australian Stock Exchange to allow international companies to trade on the local market. In addition, the company will accept another 13.6 million shares through an oversubscription of the offering.
At the same time, GI Dynamics is executing a concurrent private placement investment from existing investors Medtronic Inc. (NYSE:MDT) along with previous investors Advanced Technology Ventures, Domain, Polaris Ventures and Cutlass Capital. The offer is set to close on August 26, 2011.
In total, GI Dynamics could net more than $97.5 million from the IPO, which it will use to fund a U.S. pivotal study and commercialization efforts of the company’s EndoBarrier gastrointestinal sleeve, which recently won Australian approval for treatment of type 2 diabetes and obesity. The device won CE Mark in Dec., 2009, for six months of treatment. Officials estimate the cost of a full U.S. clinical trial to run some $26 million.
GI Dynamics, which was founded in 2003, has already raised $76 million through a series of three funding rounds and another $6 million in convertible notes. As of the end of 2010, GI Dynamics has spent about $62.9 million developing the product, according to regulatory documents filed in conjunction with the IPO.
The EndoBarrier is a plastic sleeve inserted endoscopically into the small intestine, where it slows the uptake of nutrients from food to induce weight loss and help control the symptoms of diabetes.
The device can be implanted without surgery, which company president & CEO Stuart Randle views as the next wave for medical devices. “I think the next generation of technologies is going to be combinations of devices, combinations of drugs and combinations of devices and drugs, all focused on effecting multiple mechanisms of action simultaneously ’ and less invasively than surgery,” Randle told MassDevice in a June 2009 interview.
The Endobarrier has been approved for 12 months of treatment in the European Union, and is commercially available in Chile, Germany, the United Kingdom and the Netherlands. The company has also received an investigational device exemption approval to commence a pilot trial of the EndoBarrier in the United States.
A series of clinical studies in 2009, as well as more recent research, has showed that patients treated with the EndoBarrier reduced their average blood glucose levels and lowered other diabetic factors including fasting blood glucose, and morbidly obese patients lost significant amounts of weight.
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