The management of obesity is challenging and obesity surgery is by far the most effective treatment currently available. Recent medical research indicates that it also improves the management of blood glucose levels in people with type 2 diabetes. Obesity surgery carries different risks and benefits and it is important to balance these by choosing the right procedure for each patient. Therefore new effective strategies to prevent and reduce obesity and its complications such as type 2 diabetes mellitus are needed. This study is designed to see whether a new device called the EndoBarrier Gastrointestinal Liner helps patients manage their blood sugar levels and lose weight. It is a randomised, placebo controlled trial which compares the potential of the EndoBarrier device with conventional drug therapy, diet and exercise for obesity related type 2 diabetes, and their effectiveness on metabolic state (HbA1c reduced by 20% and blood pressure below 135/85), weight loss, and quality of life. It will further evaluate whether any other conditions that may be related to obesity could become less severe and collect information about complications to determine the safety of the device. The study will also perform various measurements and tests to understand the underlying mechanism of the device. After an initial screening visit to determine patients eligibility, they will be invited for 14 subsequent visits. Patients will be randomised into either having the EndoBarrier device or standard medical therapy treatment for 12 months followed by another 12 months follow-up period. They will also be routinely seen by specialist dietitian who will provide dietetic support throughout the study.

Patients will be recruited via primary care and secondary care trusts. After an initial screening visit to determine subject's eligibility, they will be randomised to either the EndoBarrier or Control arm (conventional medical therapy including dietary counselling), and invited for 15 study visits over 24 months. The standard medical therapy drug titrations will be carried out in accordance with the guidelines of the American Diabetes Association. These guidelines have been chosen as they are applicable to an International audience and thus would adhere to the current best worldwide practice that would still be likely to be relevant when the results of this trial are published following study completion.

Patients will receive the intervention for 12 months and then be followed up for 12 months. They will be contacted via telephone in between visits to monitor any problems and boost motivation.

The main outcome of this study is to compare the EndoBarrier device with conventional medical therapy, diet and exercise for obesity related type 2 diabetes and their effectiveness on:

1. Metabolic state as defined by the International Diabetes Federation (IDF) with an HbA1c < 6% (or < 42 mmol/mol) and a blood pressure < 135/85mmHg
2. Absolute weight loss.

Patients will also be invited to participate in one of 3 sub-groups as part of the mechanistic studies (Group 1: functional MRI (fMRI), Group 2: insulin clamps or Group 3: food preference). Participation in the sub-studies is optional.

The following assessments will be performed at visit 1 (Screening Visit):

Informed consent, inclusion and exclusion criteria, demographics, medical history, physical examination, body measurements including height, weight and waist , vital signs, ECG, urine albumin-creatinine ratio, routine haematology and biochemistry, C13 urea breath test and urine pregnancy test, if applicable. Additional checks will be completed if the subject consents to take part in a sub-group mechanistic study.

Once all data including blood test results related to the screening have been obtained, the Investigator will review the subject's eligibility to continue in the trial. If the subject is eligible after this review, the subject will be randomised into one of the two study arms (EndoBarrier or Control).

Both groups will undergo the following measurements:

• Body weight and waist circumference, blood pressure, changes in illness and medication and adverse events will be checked at all visits.
• Blood samples will be obtained at 13 visits
• Urine albumin:creatinine ratio: urine samples will be collected at visit 3, 5, 8, 10 and 14
• Questionnaires (Health Economics) will be completed at visits 3, 5, 6, 7, 8, 10 and 14.
• Dietary counselling: at visits 2, 4 (control arm only), 6, 7, 9, 11, 12, 13, and 15 subjects will receive diet (either in groups or individually) by a qualified dietitian.

EndoBarrier group:

Visit 2 (- 4 weeks) will include dietary counselling with a dietitian, dietary preparation pre- and post-intervention and a medical consultation (including distribution of proton pump inhibitors) in preparation for the EndoBarrier implant.

At visit 4 (0 weeks) the EndoBarrier device will be implanted. The subject will attended the hospital in a fasting state and will receive a general anaesthetic before the device placement procedure. A small tube (the endoscope) is inserted into the mouth and guided to the small intestine for visual examination of this area by the physician. Then a guide wire will be inserted through the endoscope, after which the endoscope is removed but the guide wire is left in place. A capsule (containing the device) is placed on the guide wire and guided to the destination in the small intestine. The physician can see the capsule under x-rays as it is moved towards the small intestine. When the physician determines that the capsule has reached the correct location, the guide wire is removed, which releases the device. When the device is released, it also releases a small plastic ball (slightly larger than a pea). The ball is excreted naturally via a stool. Normally, this does not cause any discomfort. The device remains in the small intestine until it is removed after 12 months.

After the procedure (up to 12 hours) the subject may need to stay overnight in the hospital so the physician can monitor their condition, but this usually is not required.

During insertion fluroscopy will be used to determine the position of the device. Videos and photos of the fluoroscopy images are recorded to help the investigators make treatment decisions and may be passed on to the study sponsor. The images will not contain any patient identifiable data but will be labelled with initials and study participation number only.

At visit 11 (12 months) the EndoBarrier device will be removed. The removal procedure is comparable to the placement procedure but usually requires less time. Before the device removal procedure, the subject will receive a general anaesthetic. During device removal, an endoscope is inserted into the mouth and guided to the small intestine for visual examination of this area by the physician. A guide wire is inserted into the endoscope. The end of the endoscope has a small hook, which the physician will use to pull the device back into the endoscope. The endoscope containing the device is then removed through the mouth. The physician will then insert the endoscope again to inspect the area where the device was placed. After the procedure, the subject can return home.

All subjects in the EndoBarrier arm will see a gastroenterologist or equivalent specialist at study visit 2, 6, 7, 9, 11, 12, 13 and 15 to discuss their well-being and any questions regarding their EndoBarrier implant. EndoBarrier patients will also receive frequent reviews with a diabetes specialist to review their medication regimen (visits 2, 6, 7, 9, 12, 13 and 15).

Control group (Standard Medical Therapy) Standard medical therapy will be carried out in accordance with the guidelines of the American Diabetes Association. Patients will be seen at visits 2, 4, 6, 7, 9, 11, 12, 13 and 15 for follow-up of their diabetes control by a diabetes specialist.

Both groups will provide a blood sample for DNA/RNA sampling: at visit 3 and samples for metabolomics (blood, urine, feces): at visits 3, 5, 8, 10 and 14

Subjects who agree to participate in a sub-study will be asked to complete additional tests including:

• Fasting Gut hormones and metabolites (Group 1-3): at visits 3, 5, 8, 10 and 14
• Post meal gut hormones and metabolites (Group 1 and 3): at visits 3, 5, 8, 10
• Eating and behaviour questionnaires (Group 1-3): at visits 3, 8, 10 and 14
• Functional MRI (Group 1): at visits 3 and 8
• Taste and Food preference (Group 3): at visits 3, 5, and 8
• Eating behaviour computerised tasks (Group 1 and 3): at visits 3, 8, 10 and 14
• Cognitive Assessment tasks (Group 1): at visits 3, 8 and 10
• Insulin Clamps (Group 2): at visits 3, 5, and 8

Inclusion Criteria:

1. Age 18-65 years (male or female)
2. T2DM for at least 1 year (HbA1c 7.5-10.0% = 58-86 mmol/mol)
3. On oral T2DM medications (metformin is allowed, but not required)
4. BMI 30-50 kg/m2 with adequate insulin reserve as indicated with insulin C-peptide levels > 1665 pmol/L

Exclusion Criteria:

1. Language barrier, mental incapacity, unwillingness or inability to understand and be able to complete questionnaires
2. Non-compliance with eligibility criteria
3. Females of childbearing potential who are pregnant, breast-feeding or intend to become pregnant or are not using adequate or reliable contraceptive methods
4. Current use of insulin
5. Previous diagnosis with Type 1 DM or a history of ketoacidosis
6. Requirement of NSAIDs (non-steroidal anti-inflammatory drugs) or prescription of anticoagulation therapy during the implant period
7. History of iron deficiency and/or iron deficiency anaemia
8. Symptomatic gallstones or kidney stones at the time of screening
9. History of coagulopathy, upper gastro-intestinal bleeding conditions such as oesophageal or gastric varices, congenital or acquired intestinal telangiectasia
10. Previous GI surgery that could affect the ability to place the device or the function of the implant
11. History or presence of active H. pylori (if subjects are randomised into the EndoBarrier arm and have a history or presence of active H. pylori - tested during study visit 2 - they can receive appropriate treatment and then subsequently enrol into the study)
12. Family history of a known diagnosis or pre-existing symptoms of systemic lupus erythematosus, scleroderma or other autoimmune connective tissue disorder
13. Severe liver (AST, ALT or gGT >4 times upper limit) or kidney failure (serum creatinine >180mmol/l), estimated Glomerular Filtration Rate (GFR) cut-off is 60
14. Severe depression, unstable emotional or psychological characteristics (indicated by Beck Depression Inventory II score >28)
15. Poor dentition and inability to adequately chew food
16. Planned holidays up to three months following the EndoBarrier Implant
17. Previous EndoBarrier implantation
18. Metal implant unsuitable for MRI scanning and claustrophobia as contraindications for MRI scans (sub-group 1 - fMRI study only)
19. Vegetarian, vegan, gluten or lactose intolerance as unsuitable for fMRI food picture paradigm (sub-group 1 - fMRI only)