GI Dynamics, Inc. ('GID') is a Boston US-based company focused on developing EndoBarrier.
EndoBarrier is a unique medical device that provides a minimally invasive, reversible treatment option for subjects with type 2 diabetes mellitus (T2DM) and obesity, who are unable to control their disease using standard treatments alone.
GID would need to capture only a small share of a vast patient pool (up to 30m patients in the US alone) to achieve significant commercial potential. EndoBarrier is the only implant targeted for treatment of type 2 diabetes mellitus (T2DM) to our knowledge. It therefore has a clear opportunity to take the first mover position as a less invasive and less risky procedure compared to gastric bypass surgery combined with non-insulin medication.
Data from extensive clinical studies including from the REVISE randomised controlled National Health Service study, showed disease-modifying outcomes in patients treated with EndoBarrier + standard medical therapy.
Our near-term forecasts cover investment in development and assume that GID will need to raise a total $45m to fund its current strategy. We also acknowledge that the current leadership has put in place rigorous reporting processes in conjunction with the FDA to support the ongoing regulatory process helping rebuild trust in its execution. The rate of diagnosis at 1.5m new cases per annum in the US indicates that the population of T2DM sufferers could double by 2030 to exceed 40m.
Using a sum-of-the parts, risk adjusted DCF with a discount rate of 15%, our valuation of GID is $45.4m. This includes $16.7m for the US, $21.9m under CE Mark opportunities and $9m for India and assumes future refinancing.