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GI Dynamics Announces Resolution of Litigation with Gore



  GI Dynamics Announces Resolution of Litigation with Gore

                  Gore Drops All Claims Against GI Dynamics

Business Wire

LEXINGTON, Mass. & SYDNEY -- January 9, 2013

GI Dynamics, Inc. (GI Dynamics or the Company) (ASX: GID) today announced that
it has reached a settlement with W.L. Gore & Associates (Gore) in litigation
brought by Gore in the United States District Court for the District of
Arizona (“Court”). Under the settlement, GI Dynamics retains exclusive
ownership and control of its patent portfolio, and both parties have dismissed
all claims against each other. GI Dynamics has also granted Gore a
non-exclusive, royalty-free license to use GI Dynamics’ patents, but only in
the vasculature (i.e., blood vessels). Gore is not licensed to use GI
Dynamics’ patents for any applications in the gastrointestinal tract, which is
the area of the body in which GI Dynamics’ products are designed to be used.
Neither side will make any cash payments to the other, nor will any royalties
be due.

“We are delighted with this settlement,” stated Stuart A. Randle, president
and CEO of GI Dynamics. “It confirms that GI Dynamics is the sole and
exclusive owner of its technology and patent portfolio. With the litigation
resolved, we will continue to focus on expanding the availability of
EndoBarrier® through new commercial centers and markets outside the U.S. and
the pivotal clinical trial in the U.S. We hope to address the unmet needs of
the millions of people living with uncontrolled type 2 diabetes around the
world.”

Background

As previously disclosed in the IPO Prospectus, GI Dynamics has been engaged in
litigation in the Court with one of its suppliers, Gore, which supplies a
material used to manufacture the Company's products. Gore commenced
proceedings against the Company in 2010, claiming that it was the co-owner
(i.e., the equal joint owner) of all of the Company’s patents and patent
applications as well as claiming that certain of its employees were
co-inventors of the Company's issued patents.

The Company filed counterclaims against Gore seeking declarations that Gore
was neither a co-owner nor a co-inventor of any of its patents or applications
and alleging misuse and misappropriation by Gore of the Company’s trade
secrets, breach of contract, misrepresentation, and unfair and deceptive trade
practices.

A jury trial in the matter was scheduled to begin on January 15.

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, 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 EndoBarrier in select regions in Europe, South America and
Australia and is planning near-term commercial expansion into additional
markets. 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 enrolment 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.

Contact:

Investor Enquiries:
United States:
GI Dynamics, Inc.
Robert Crane, Chief Financial Officer, +1 781-357-3250
or
Australia:
Inteq Limited
Kim Jacobs, +61 2 9231 3322
or
Media Enquiries:
North America/Europe:
Pure Communications Inc.
Andrea Johnston, + 1 910-509-3970
or
Australia:
Buchan Consulting Group
Haley Price, +61 3 8866 1215
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