GI Dynamics, Inc. (Company or GI Dynamics) (ASX: GID) announced today that it has received conditional approval from the U.S. Food and Drug Administration (FDA) to commence a pivotal clinical trial of the EndoBarrier® for the treatment of patients who have uncontrolled type 2 diabetes and are obese. The EndoBarrier is already approved and commercially available in select markets, including Chile, Australia and several countries in Europe.

"We are very pleased that the Agency has chosen to recognize the substantial amount of scientifically sound data generated from our clinical trials conducted outside the United States, allowing us to move directly into a pivotal trial," said Stuart A. Randle, president and chief executive officer, GI Dynamics. "Going directly into a pivotal trial eliminates the need for a pilot trial and has the potential to accelerate commercialization of the EndoBarrier in the U.S. We look forward to continuing to work with the Agency to finalize the remaining details of the study and expect to initiate the trial before the end of the year."

About the Clinical Trial

Conditional approval from the FDA indicates the Agency is in agreement with the overall trial design and, while minor details are being finalized, allows the Company to move forward with the Institutional Review Board (IRB) approval process required prior to enrolling patients into the pivotal study.

The pivotal trial is a randomized, multi-center, double-blind, sham controlled trial that is expected to enroll approximately 500 people living with uncontrolled diabetes and obesity who meet the enrollment criteria at 25 sites in the United States. The trial is designed to assess improvements in diabetes over a treatment period of up to 12 months. The primary endpoint of the trial is improvement in HbA1c (a key blood sugar measure for diabetes); secondary measures include weight loss and improvements in select cardiovascular risk factors, such as cholesterol.

GI Dynamics has established an Executive Committee (EC) of leaders in metabolic disease and endoscopic techniques to oversee the U.S. clinical trial. Led by Committee Chair Lee Kaplan, M.D., Ph.D., Massachusetts General Hospital, the EC also includes Louis Aronne, M.D., New York Presbyterian Hospital, Weill Cornell Medical Center; John Buse, M.D., Ph.D., University of North Carolina at Chapel Hill; and Steven Edmundowicz, M.D., F.A.S.G.E., Washington University in St. Louis.

Physicians or patients interested in learning more about the trial may call (781) 357-3252.

About EndoBarrier®

The EndoBarrier has been studied outside the United States in 13 clinical trials and has been used in more than 500 patients. It is a thin, flexible, tube-shaped liner that forms a physical barrier between food and a portion of the wall of the intestine. Once implanted, the EndoBarrier has been shown to affect certain gastrointestinal hormones involved in insulin sensitivity, glucose metabolism and satiety1, and these changes allow for rapid and sustained improvement of type 2 diabetes and weight loss.

About Type 2 Diabetes and Obesity

Estimates indicate that type 2 diabetes affects more than 23 million people in the United States2, and approximately 320 million people worldwide3. Type 2 diabetes, which accounts for approximately 90 percent of all cases of diabetes, occurs when the pancreas has reduced effectiveness in insulin production associated with an increase in insulin resistance. The diagnosis of type 2 diabetes usually occurs after the age of 40 and is often, but not always, associated with obesity.

About GI Dynamics

GI Dynamics, Inc. (ASX: GID) is pioneering the development and commercialization of effective, non-surgical treatments targeting the large and growing global patient populations with type 2 diabetes and obesity. The company's flagship product, the EndoBarrier®, is a novel, non-surgical device proven to lower blood glucose levels and promote weight loss in diabetic patients and/or obese patients during the implant period. GI Dynamics currently markets the EndoBarrier in select regions in Europe, South America and Australia and is planning near-term commercial expansion into additional European countries. The EndoBarrier is not approved for sale in the United States and is considered investigational. Founded in 2003, GI Dynamics is headquartered in Lexington, Massachusetts. For more information, please visit www.gidynamics.com.

Forward-Looking Statements

This announcement contains or may contain forward-looking statements that are based on management's beliefs, assumptions and expectations and on information currently available to management. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements, including without limitation our expectations with respect to our ability to commercialize our EndoBarrier® including our estimates of potential revenues, costs, profitability and financial performance; our ability to develop and commercialize new products including our ability to obtain reimbursement for our products; our expectations with respect to our clinical trials, including enrollment in or completion of our clinical trials and our associated regulatory submissions and approvals; our expectations with respect to the integrity or capabilities of our intellectual property position. Management believes that these forward-looking statements are reasonable as and when made. You should not place undue reliance on forward-looking statements because they speak only as of the date when made. GI Dynamics does not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. GI Dynamics may not actually achieve the plans, projections or expectations disclosed in forward-looking statements, and actual results, developments or events could differ materially from those disclosed in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, described in "Risk Factors" in our Prospectus lodged with the Australian Securities & Investments Commission on 3 August 2011.

[1] C de Jonge, JW Greve, N Bouvy, et al, EndoBarrier Gastrointestinal Liner treatment rapidly improves diabetes parameters paralleled by increased postprandial GLP-1 and PYY levels in obese type 2 diabetic patients, Department of Surgery, Maastricht University Medical Centre, presented at IFSO 2011, Hamburg, Germany.

[2] Centers for Disease Control and Prevention. National diabetes fact sheet: national estimates and general information on diabetes and prediabetes in the United States, 2011.

[3] International Diabetes Federation, 5th edition of the Diabetes Atlas, 2011.

Investor Enquiries:
United States:
Robert Crane, Chief Financial Officer
+1 (781) 357-3250
or
Australia:
Kim Jacobs, Inteq Limited
+61 2 9231 3322
or
Media Enquiries:
North America/Europe:
Dan Budwick, Pure Communications Inc.
+ 1 (973) 271-6085
or
Australia:
Rebecca Wilson, Buchan Consulting Group
+61 3 9866 4722