GI Dynamics gets funding for French obesity trial

GI Dynamics (ASX:GID) has secured French Government funding for a two-year trial of its EndoBarrier Therapy treatment in type 2 diabetes and obesity.

The French Ministry of Social Affairs and Health will provide €1.16 million ($1.67 million) in funding for the ENDOMETAB study, which will be coordinated by the University Hospital of Lille.

GI Dynamics aims to enrol 174 obese patients across multiple French cities. The trial will compare the impact and cost of 12 months’ treatment with EndoBarrier against the impact of 12 months’ conventional treatment, including dietary counselling, physical activity and lifestyle changes.

The French Government is supporting the study through its soutien aux techniques innovantes couteuses (STIC) program, which is designed to evaluate clinically tested new treatment options with reimbursement in mind.

The trial protocol has been designed by Professor François Pattou, professor of general surgery and head of the department of general and endocrine surgery at the University Hospital of Lille. Pattou also led a pilot trial last year.

“Like the rest of the world, France is facing a dual crisis,” Pattou said. “Obesity and metabolic diseases are affecting more people in our nation every year and, left uncontrolled, they can lead to many other complications including kidney disease, cardiovascular disease and stroke.”

EndoBarrier is a thin tube-shaped liner designed to be inserted non-surgically through the mouth. Once implanted, it serves as a barrier between food and a portion of the intestine. In trials it has been shown to cut down on blood glucose levels and promote weight loss.

EndoBarrier has TGA approval in Australia and a CE Mark in Europe, and GI Dynamics is in trials in the US as part of an FDA application.

In a research note, Bell Potter Securities said being selected for the STIC program “is a huge endorsement and in itself is a feather in GI Dynamics’ cap”.

The firm pointed out that because ENDOMETAB is an economic study, the company may be able to use the results to further its reimbursement case in other countries including the US.

Bell Potter values GID shares at $1.72 per CDI base case and $2.73 per CDI optimistic case, and has a long-term target price of $1.70 per CDI.

GI Dynamics shares were trading 3.33% higher at $0.62 as of around 12.30 pm on Friday.