GI Dynamics breaks codes

Shareholders in GI Dynamics (GID) will be hoping that the issuance of reimbursement codes in two countries for its device will stem the recent bout of profit taking.

Management said this morning that Germany and Switzerland has assigned the preliminary codes, which is an important first step to reimbursing the cost of having GI Dynamics’ intestinal liner to help patients with type 2 diabetes.

Getting governments and insurers in developed countries to recognise the treatment for reimbursement is a very important end goal for GI Dynamics. Diabetes and obesity (two related conditions) are the biggest healthcare market in the world.

However, the blue sky outlook has not saved the stock from sliding 14% since hitting a 1½-year high of 95.5 cents that was hit two weeks ago.

There is nothing sinister about the correction in the stock though as it looked like it had a little ahead of itself since we wrote about the stock on July 17 and issued a bullish report.

GI Dynamics, which is part of the Uncapped 100, is still up close to 40% since the article was published.