GI Dynamics Announces Commercial Availability of EndoBarrier® Therapy in Israel for the Treatment of

GI Dynamics Announces Commercial Availability of EndoBarrier^®Therapy in Israel for the Treatment of Type 2 Diabetes and/or Obesity

Sheba Medical Center is First to Offer EndoBarrier Therapy in Israel

LEXINGTON, Mass. & SYDNEY--(BUSINESS WIRE)-- GI Dynamics, Inc. (ASX: GID) today announced that The Sheba Medical Center (Tel Hashomer) at Ramat-Gan, Israel, is now offering EndoBarrier^® Therapy, a non-surgical, non-pharmaceutical treatment for type 2 diabetes and/or obesity. The Center is the first in the country to treat patients with this revolutionary medical device that helps reduce blood sugar and body weight at the same.

"Our diabetes center is at the forefront of innovative advances in managing type 2 diabetes and obesity, and we are pleased to offer EndoBarrier Therapy to our patients," said Gabriella Lieberman, M.D., endocrinologist, head of obesity clinic, The Sheba Medical Center Institute of Endocrinology. "Our first groups of patients responded well to this brief, endoscopic procedure, and are achieving control of their diabetes while losing weight. It seems like EndoBarrier Therapy will become an integral part of our diabetes and obesity management program."

In addition, GI Dynamics announced it has entered into an agreement with Lavi - Medical Agencies (Lavi) as the exclusive distributor for EndoBarrier in Israel. EndoBarrier received medical device registration approval from the Israeli Ministry of Health in February 2012 for the treatment of type 2 diabetes and obesity for up to 12 months. It is also currently available in Australia, Chile and select countries in Europe.

"We are well known for our expertise in identifying high potential new and innovative technologies and bringing them to the local market," said Dani Shaham, CEO of Lavi. "EndoBarrier Therapy enables diabetes control along with weight loss without the risks associated with bariatric surgery. We are excited to add EndoBarrier Therapy to our portfolio of innovative products and look forward to providing this novel treatment to the Israeli healthcare community."

"Our first patient cases in Israel mark yet another milestone in the global commercialization of EndoBarrier Therapy," said Mark C. Twyman, chief commercial officer, GI Dynamics. "Sheba Center is a highly accredited, national institution that is renowned for delivering exceptional healthcare in Israel, and we are delighted to be working with them. In the coming months, we will continue to cultivate and train additional centers in Israel and work closely with our distributor to provide EndoBarrier Therapy to the many patients living with uncontrolled type 2 diabetes and obesity."

According to the Israel Diabetes Association, there are an estimated 600,000 people currently living with diabetes, and one-third of those are undiagnosed.¹ According to the World Health Organization, overweight and obese people (BMI ≥25 kg/m²) have been estimated to account for about 65-80 percent of all new cases of type 2 diabetes.²

About EndoBarrier Therapy

EndoBarrier Therapy is a revolutionary, non-surgical, non-pharmaceutical treatment proven to help people living with uncontrolled type 2 diabetes and weight problems achieve rapid and dramatic reductions in blood sugar levels, as well as substantial weight loss. EndoBarrier Therapy is a convenient and discreet treatment for people whose diabetes medications are no longer effective, who are at risk for serious health complications and who want to avoid the progression to daily insulin injections. An innovative, reversible medical device, EndoBarrier Therapy also enables patients to avoid the lifestyle changes and frequent post-surgical interventions associated with irreversible bypass surgery and gastric banding. This first-of-its-kind therapy is helping patients around the world fight their battle against type 2 diabetes and obesity while providing a pathway to a healthier lifestyle. For more information, please visit www.EndoBarrier.com.

About GI Dynamics

GI Dynamics, Inc. (ASX: GID) is the developer and marketer of EndoBarrier®, a breakthrough device that represents an entirely new class of non-surgical, non-pharmaceutical therapy for the treatment of type 2 diabetes and/or obesity. EndoBarrier is approved and commercially available in multiple countries outside the U.S.; and GI Dynamics is conducting a pivotal clinical trial of EndoBarrier in the U.S. for the treatment of patients who have uncontrolled type 2 diabetes and are obese. 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 Israel Diabetes Association (http://www.sukeret.co.il/en/enInfo.asp?info_id=26810)

² Diabetes Facts & Figures. World Health Organization (http://www.euro.who.int/en/what-we-do/health-topics/noncommunicable-diseases/diabetes/facts-and-figures). Accessed October 28, 2012.

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