Financial Data and Key Metrics Changes - The net loss for Q2 2025 was $27.9 million, compared to $17.2 million in Q2 2024, primarily due to changes in non-cash fair value of notes and warrants and increased operating expenses [20] - R&D expenses for the quarter were $21.2 million, up from $16.8 million in the same quarter last year, reflecting continued advancement in clinical studies [19] - SG&A expenses decreased to $4.9 million from $6.2 million in the same quarter last year, mainly due to lower stock-based compensation [19] Business Line Data and Key Metrics Changes - The Revita program is emerging as a foundational therapy for resetting the body's metabolic set point in obesity and type 2 diabetes, with new data showing up to two years of benefit in weight maintenance and blood sugar control following a single treatment [7][8] - The Rejuva program has completed preclinical efficacy, toxicity, and biodistribution studies, with plans for a phase one/two clinical study to evaluate safety and preliminary efficacy in adults with inadequately controlled type 2 diabetes [16][17] Market Data and Key Metrics Changes - The company is addressing the significant unmet need for weight regain after GLP-1 discontinuation, with a focus on patients who have lost weight through GLP-1 therapy but struggle to maintain it after stopping [4][5] - Insights from key stakeholders indicate a shift in patient and prescriber attitudes, with a growing desire for alternatives to long-term GLP-1 therapy [36] Company Strategy and Development Direction - The company has strengthened its financial position through a $23 million public offering, which could provide up to $69 million in total proceeds, positioning it to capture the value of clinical and strategic progress [6] - A nonbinding letter of intent with Bariendo aims to prepare for potential adoption of Revita pending FDA approval, focusing on pre-commercial preparation and distribution channels [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about upcoming data readouts and the potential for Revita to serve as a long-term solution for weight maintenance after GLP-1 therapy [10][22] - The company anticipates a transformational second half of the year, with multiple clinical milestones ahead, including randomized data from the REMAIN one midpoint cohort [21][22] Other Important Information - The company has been granted two new US patents, reinforcing its position as an innovation leader in gut-targeted metabolic therapy, with over 100 granted patents worldwide [14] - The company aims to redefine the risk-benefit profile of long-term GLP-1 therapy with Rejuva, potentially offering a durable solution for chronic metabolic disease [17] Q&A Session Summary Question: What additional data points will be shared in the midpoint update? - Management indicated that the update will focus on safety, tolerability, and effectiveness of weight loss maintenance, with visibility into the overall population's behavior [27][28] Question: What is the status of Rejuva IND clearance? - Management reported significant progress and expects to see the lot release of the GMP product soon, with preliminary data anticipated in 2026 [30] Question: What trends are observed in the GLP-1 market? - There is a growing desire among patients to stop long-term GLP-1 therapy, highlighting the need for better real-world outcomes, which bodes well for Revita and Rejuva [36] Question: How does GLP-1 therapy impact observed outcomes? - Management believes that the contribution from GLP-1 to weight loss in patients is minimal, as consistent signals of weight loss have been observed across various studies [42] Question: Will patients in the REMAIN one cohort be tracked longer for durability? - Management confirmed that patients will be followed for a year, with incremental data updates expected over time [48][49] Question: What are the expectations for DEXA scans in the REVEAL trial? - DEXA scans will not be included in the open-label REVEAL study, and historical comparators for body composition upon tirzepatide discontinuation are lacking [70]

[PART I FINANCIAL INFORMATION](index=10&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=10&type=section&id=Item%201.%20Financial%20Statements) The unaudited financial statements show a significant net loss, a decrease in cash, and substantial doubt about the company's ability to continue as a going concern Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $22,291 | $67,464 | | Total assets | $62,006 | $108,077 | | Total liabilities | $80,218 | $79,653 | | Accumulated deficit | $(466,934) | $(415,310) | | Total stockholders' equity (deficit) | $(18,212) | $28,424 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $0 | $76 | | Research and development | $40,586 | $31,186 | | Selling, general and administrative | $10,252 | $13,374 | | Loss from operations | $(50,838) | $(44,527) | | Net loss | $(51,624) | $(20,551) | | Net loss per share, basic and diluted | $(1.05) | $(0.57) | - The Company has a history of operating losses, with an accumulated deficit of **$466.9 million** as of June 30, 2025[48](index=48&type=chunk) - Management has concluded that there is **substantial doubt about the Company's ability to continue as a going concern** within twelve months from the report's issuance date[48](index=48&type=chunk) - In August 2025, the Company completed an offering of common stock and warrants, receiving net proceeds of approximately **$20.7 million**[44](index=44&type=chunk)[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses its focus on metabolic disease therapies, recent clinical progress, and a critical liquidity position that raises going concern doubts [Business Overview and Recent Developments](index=27&type=section&id=Business%20Overview%20and%20Recent%20Developments) The company is prioritizing its Revita program for post-GLP-1 weight maintenance and advancing its Rejuva gene therapy platform with a European regulatory submission - The company is prioritizing the **REMAIN-1 pivotal study** for Revita, which evaluates its potential to maintain weight loss after patients discontinue GLP-1 medication[105](index=105&type=chunk)[108](index=108&type=chunk) - Positive 3-month data from the REVEAL-1 Cohort of the REMAIN-1 study showed that **12 of 13 participants maintained or lost weight** after stopping GLP-1 therapy[116](index=116&type=chunk) - For the Rejuva platform, the company submitted the first module of a **Clinical Trial Application (CTA) in Europe** for its lead candidate RJVA-001[109](index=109&type=chunk)[122](index=122&type=chunk) - The company entered into a non-binding **Letter of Intent (LOI) with Bariendo Inc.** to evaluate a potential collaboration for using Revita as a post-GLP-1 weight maintenance intervention[124](index=124&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) The company generated no revenue in H1 2025, while a significant increase in R&D expenses drove a wider net loss compared to the prior year Comparison of Results for the Six Months Ended June 30 (in thousands) | Line Item | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $76 | $(76) | (100.0%) | | Research and development | $40,586 | $31,186 | $9,400 | 30.1% | | Selling, general and administrative | $10,252 | $13,374 | $(3,122) | (23.3%) | | Loss from operations | $(50,838) | $(44,527) | $(6,311) | 14.2% | | Net loss | $(51,624) | $(20,551) | $(31,073) | 151.2% | - The **$9.4 million increase in R&D expenses** for the six-month period was primarily driven by a $4.4 million increase in Revita-related clinical expenses and a $5.7 million increase in Rejuva-related development[147](index=147&type=chunk)[148](index=148&type=chunk) - The **$3.1 million decrease in SG&A expenses** for the six-month period was mainly due to a $3.7 million decrease in stock-based compensation[150](index=150&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is critically low, with existing cash insufficient to fund operations for the next twelve months despite recent financing efforts - As of June 30, 2025, the company had **$22.3 million in cash and cash equivalents**, which is not sufficient to fund the operating plan for at least twelve months[170](index=170&type=chunk) - The company raised approximately **$20.7 million in net proceeds** from its August 2025 Offering of common stock and warrants[166](index=166&type=chunk) - The company is subject to a **minimum liquidity covenant of $10.0 million** under its 2023 Notes agreement and will not be able to comply without additional financing[157](index=157&type=chunk)[170](index=170&type=chunk) Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(46,278) | $(30,448) | | Net cash used in investing activities | $(546) | $(1,319) | | Net cash provided by financing activities | $1,651 | $100,997 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to various market risks, with no material changes reported since the end of the 2024 fiscal year - The company is exposed to interest rate, credit, foreign currency, and inflation risk, with **no material changes to these risks reported** during the quarter[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the quarter's end, with no material changes to internal controls - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective at the reasonable assurance level**[194](index=194&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[195](index=195&type=chunk) [PART II OTHER INFORMATION](index=43&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings - The company is **not subject to any material legal proceedings**[198](index=198&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous significant risks, including its financial condition, regulatory hurdles, third-party reliance, competition, and intellectual property protection [Risks Related to Financial Condition and Capital Requirements](index=43&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Capital%20Requirements) The company has a history of significant losses and an urgent need for capital, creating substantial doubt about its ability to continue as a going concern - The company has a **limited operating history**, has not completed any pivotal clinical studies, and has no products approved for commercial sale in the United States[200](index=200&type=chunk) - The company has incurred significant net losses since inception, with an accumulated deficit of approximately **$466.9 million** as of June 30, 2025[203](index=203&type=chunk) - **Substantial doubt exists about the company's ability to continue as a going concern**, as existing cash is not sufficient to fund operations for at least twelve months[210](index=210&type=chunk) [Risks Related to Development, Regulatory Approval and Commercialization](index=51&type=section&id=Risks%20Related%20to%20Development,%20Regulatory%20Approval%20and%20Commercialization) The company faces a lengthy and unpredictable regulatory approval process for its product candidates, with uncertain clinical outcomes and reimbursement challenges - The **regulatory approval process** for medical devices and biopharmaceutical products is lengthy, time-consuming, and inherently unpredictable[230](index=230&type=chunk) - Clinical studies are expensive, difficult to design, and have **uncertain outcomes**, with the potential for substantial delays[243](index=243&type=chunk) - The company's Rejuva gene therapy candidates are expected to be regulated as a **combination product**, which may add complexity to regulatory approval[274](index=274&type=chunk) - Commercial success depends on obtaining **adequate coverage and reimbursement** from third-party payors, which is uncertain[269](index=269&type=chunk) [Risks Related to Business and Strategy](index=69&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Strategy) The business is substantially dependent on its two lead candidates and faces significant challenges in gaining market acceptance and competing with established firms - The company is **substantially dependent on the success of its lead product candidates**, Revita and Rejuva[299](index=299&type=chunk) - The medical device and biopharmaceutical markets are highly competitive, and the company faces **significant competition from larger companies** with greater resources[323](index=323&type=chunk) - **Market acceptance of the company's products is not guaranteed** and depends on convincing physicians, hospitals, and payors of their benefits[313](index=313&type=chunk) [Risks Related to Manufacturing](index=82&type=section&id=Risks%20Related%20to%20Manufacturing) The company relies on third-party and sole-source suppliers for manufacturing, creating supply chain risks, and concentrates its operations in a single facility - The company **relies on third-party manufacturers** for components and materials, increasing the risk of supply shortages and cost issues[355](index=355&type=chunk) - The company **depends on third-party sole-source suppliers** for certain Revita components, and an interruption could materially harm the business[364](index=364&type=chunk) - The company's research, development, and manufacturing operations are conducted in a **single facility**, making it vulnerable to disasters or other interruptions[369](index=369&type=chunk) [Risks Related to Intellectual Property](index=95&type=section&id=Risks%20Related%20to%20Intellectual%20Property) The company's success depends on its ability to obtain and defend its intellectual property amid an uncertain patent process and litigation risks - The company's ability to commercialize its products depends on its ability to **obtain and maintain patent protection**, which is uncertain[409](index=409&type=chunk) - The company may face **intellectual property litigation**, which is expensive and time-consuming, and could require obtaining licenses on unfavorable terms[424](index=424&type=chunk)[431](index=431&type=chunk) - If the company is unable to **protect the confidentiality of its trade secrets**, its business and competitive position may be harmed[445](index=445&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=122&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities and confirms no material change in the intended use of its IPO proceeds - There were **no unregistered sales of equity securities** in the reporting period[511](index=511&type=chunk) - There has been **no material change in the planned use of proceeds** from the company's IPO[513](index=513&type=chunk) [Item 5. Other Information](index=122&type=section&id=Item%205.%20Other%20Information) An executive officer adopted a Rule 10b5-1 trading plan during the quarter for the potential sale of company stock - On May 28, 2025, Jay Caplan, President and Chief Product Officer, adopted a **Rule 10b5-1 trading arrangement** for the sale of up to 169,173 shares of common stock[520](index=520&type=chunk)

[Business Highlights and Clinical Pipeline Update](index=1&type=section&id=Business%20Highlights%20and%20Clinical%20Pipeline%20Update) The company reports positive clinical progress for its Revita® program and advancements in the preclinical Rejuva® gene therapy platform [Revita® Program](index=1&type=section&id=Revita%C2%AE%20Program) The Revita® procedure is advancing through the REMAIN-1 pivotal study to evaluate its efficacy post-GLP-1 drug discontinuation [REVEAL-1 Cohort](index=1&type=section&id=REVEAL-1%20Cohort) - Positive 3-month data showed that **12 of 13 participants maintained or further reduced their weight** after discontinuing GLP-1 medication and receiving a single Revita procedure[5](index=5&type=chunk)[6](index=6&type=chunk) - Median weight remained stable through 3 months (**0.46% change**), compared to a typical **5-6% weight rebound** seen in other clinical studies after GLP-1 withdrawal[6](index=6&type=chunk) - Upcoming data releases for the REVEAL-1 Cohort are expected for the 6-month follow-up in Q4 2025 and the 1-year follow-up in Q2 2026[6](index=6&type=chunk) [REMAIN-1 Midpoint Cohort](index=2&type=section&id=REMAIN-1%20Midpoint%20Cohort) - Enrollment is complete for the 45-participant randomized, double-blind REMAIN-1 Midpoint Cohort, designed to provide an early readout on Revita's potential for weight maintenance post-GLP-1[7](index=7&type=chunk)[10](index=10&type=chunk) - Key data readouts are anticipated in September 2025 (3-month data) and Q1 2026 (6-month data)[1](index=1&type=chunk)[10](index=10&type=chunk) [REMAIN-1 Pivotal Cohort](index=2&type=section&id=REMAIN-1%20Pivotal%20Cohort) - Enrollment is complete for the 315-participant randomized, double-blind REMAIN-1 Pivotal Cohort, which will evaluate the safety and efficacy of Revita for weight maintenance[8](index=8&type=chunk)[11](index=11&type=chunk) - The company expects to report 6-month primary endpoint data and submit a Premarket Approval (PMA) application to the FDA in the second half of 2026[1](index=1&type=chunk)[11](index=11&type=chunk) [Germany Real-World Registry Study](index=2&type=section&id=Germany%20Real-World%20Registry%20Study) - Data from the first 9 patients with 2 years of follow-up showed that a single Revita procedure led to a median **9.6% weight loss** and a **1.6% reduction in HbA1c** in participants with obesity and advanced T2D[9](index=9&type=chunk) - These effects were sustained through two years with **no device- or procedure-related serious adverse events** reported, supporting Revita's potential for durable, long-term metabolic control[9](index=9&type=chunk) [Rejuva® Gene Therapy Platform](index=3&type=section&id=Rejuva%C2%AE%20Gene%20Therapy%20Platform) The Rejuva® gene therapy platform is advancing its lead candidate, RJVA-001, toward first-in-human studies for T2D and obesity - Preclinical data presented at ADA and ASGCT showed a single dose of Rejuva prevented weight gain and hyperglycemia in animals, demonstrating durable metabolic improvements and supporting readiness for clinical trials[14](index=14&type=chunk) - The company submitted the first module of its CTA in Europe for RJVA-001 in May 2025 for a Phase 1/2 study in adults with inadequately controlled T2D[14](index=14&type=chunk) - Pending regulatory authorization, Fractyl expects to dose the first patients with RJVA-001 and report preliminary data in 2026[14](index=14&type=chunk) [Corporate Developments](index=3&type=section&id=Corporate%20Developments) The company strengthened its financial position, expanded its IP portfolio, and explored a potential commercial collaboration for Revita - Completed a **$23 million** underwritten public offering in August 2025, which is expected to extend the cash runway through key upcoming clinical data readouts from the REMAIN-1 Midpoint Cohort[2](index=2&type=chunk)[14](index=14&type=chunk) - Was issued **two new U.S. patents**, expanding protection for its duodenal mucosal resurfacing platform and bringing its portfolio to 32 granted U.S. patents[14](index=14&type=chunk) - Entered into a non-binding Letter of Intent with Bariendo Inc to evaluate a potential collaboration for Revita as a post-GLP-1 weight maintenance intervention, pending FDA approval[14](index=14&type=chunk) [Second Quarter 2025 Financial Results](index=4&type=section&id=Second%20Quarter%202025%20Financial%20Results) The company reported a wider net loss driven by increased R&D expenses, while maintaining a cash runway into 2026 Q2 2025 Financial Highlights (vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change Driver | | :--- | :--- | :--- | :--- | | **R&D Expenses** | $21.2M | $16.8M | Advancement of REMAIN-1 study and Rejuva program | | **SG&A Expenses** | $4.9M | $6.2M | Lower stock-based compensation expenses | | **Net Loss** | ($27.9M) | ($17.2M) | Fluctuation in fair value of notes/warrants & higher operating expenses | | **Cash & Equivalents** | $22.3M | N/A | As of June 30, 2025 | - The company believes its cash position, including proceeds from the August 2025 offering, is sufficient to fund operations into 2026[17](index=17&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents selected consolidated balance sheet and statement of operations data for the period ending June 30, 2025 [Selected Consolidated Balance Sheet Data](index=6&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20Data) The balance sheet shows a significant decrease in cash and total assets, resulting in a stockholders' deficit as of June 30, 2025 Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $22,291 | $67,464 | | Total assets | $62,006 | $108,077 | | Total liabilities | $80,218 | $79,653 | | Total stockholders' equity (deficit) | ($18,212) | $28,424 | [Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The statement of operations reveals a wider net loss for Q2 2025 compared to Q2 2024, driven by higher R&D spending Statement of Operations Highlights (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $21,151 | $16,762 | | Selling, general and administrative | $4,928 | $6,242 | | Loss from operations | ($26,079) | ($22,985) | | Net loss and comprehensive loss | ($27,889) | ($17,229) | [About the Company and Products](index=4&type=section&id=About%20the%20Company%20and%20Products) This section provides an overview of Fractyl Health's mission and its key investigational product platforms, Revita® and Rejuva® [About Fractyl Health](index=4&type=section&id=About%20Fractyl%20Health) Fractyl Health is a metabolic therapeutics company developing disease-modifying therapies for obesity and Type 2 Diabetes - The company's goal is to transform metabolic disease treatment from chronic symptomatic management to durable therapies that target the root causes of disease[19](index=19&type=chunk) [About Revita®](index=4&type=section&id=About%20Revita%C2%AE) Revita® is an investigational duodenal remodeling procedure designed to maintain weight loss after GLP-1 drug discontinuation - Revita is designed to reverse damage to intestinal nutrient sensing and signaling mechanisms caused by chronic high-fat and high-sugar diets[20](index=20&type=chunk) [About Rejuva®](index=4&type=section&id=About%20Rejuva%C2%AE) The Rejuva® platform is a preclinical gene therapy program targeting the pancreas to provide durable treatment for T2D and obesity - Rejuva aims to offer novel, disease-modifying therapies by developing locally delivered gene therapies that address the underlying root causes of metabolic diseases[21](index=21&type=chunk)

Core Insights - Fractyl Health, Inc. is advancing its Revita and Rejuva platforms aimed at treating obesity and type 2 diabetes (T2D) through innovative approaches [2][3][18] - The company recently completed a $23 million underwritten public offering to extend its cash runway for upcoming clinical milestones [2][18] - Positive early data from the REVEAL-1 Cohort indicates that Revita can help maintain weight loss after discontinuation of GLP-1 drugs [7][20] Financial Performance - For Q2 2025, Fractyl reported a net loss of $27.9 million, compared to a net loss of $17.2 million in Q2 2024, largely due to increased operating expenses [16][27] - Research and development expenses were $21.2 million for the quarter, up from $16.8 million in the same period last year, reflecting ongoing clinical study advancements [16][27] - As of June 30, 2025, the company had approximately $22.3 million in cash and cash equivalents, which is expected to fund operations into 2026 [16][27] Clinical Developments - The REMAIN-1 pivotal study includes three cohorts: REVEAL-1, REMAIN-1 Midpoint, and REMAIN-1 Pivotal, with the latter expected to report 6-month data in H2 2026 [4][9][13] - The REVEAL-1 Cohort showed that 12 out of 13 participants maintained or reduced weight after a single Revita procedure following GLP-1 discontinuation [7][8] - The REMAIN-1 Midpoint Cohort is designed to assess Revita's efficacy in maintaining weight loss after GLP-1 discontinuation, with initial data expected in September 2025 [8][12] Strategic Initiatives - Fractyl has entered a non-binding Letter of Intent with Bariendo Inc. to explore collaboration for Revita as a post-GLP-1 weight maintenance intervention [18] - The company has been issued two new U.S. patents that enhance its duodenal mucosal resurfacing platform, strengthening its intellectual property portfolio [18] - The Rejuva platform is progressing towards clinical trials, with the first-in-human study expected to begin in 2026 [11][14]

Company Overview - Fractyl Health, Inc. is a metabolic therapeutics company focused on innovative approaches to treat obesity and type 2 diabetes (T2D) [3] - The company aims to shift the treatment of metabolic diseases from chronic symptomatic management to durable disease-modifying therapies targeting organ-level root causes [3] - Fractyl has a strong intellectual property portfolio with 32 granted U.S. patents and approximately 40 pending U.S. applications, along with numerous foreign patents [3] Upcoming Events - The company will report its financial results for the second quarter of 2025 and provide business updates on August 12, 2025, at 4:30 p.m. ET [1] - Harith Rajagopalan, M.D., Ph.D., Co-Founder and CEO, will present at the Canaccord Genuity 45th Annual Growth Conference on August 13, 2025, at 11:30 a.m. ET [2] - A live webcast of the conference call and presentation will be available on Fractyl Health's website, with an archived version for later access [2]

Core Viewpoint - Fractyl Health, Inc. has announced a public offering of 19,047,619 shares of common stock, along with Tranche A and Tranche B warrants, aiming for gross proceeds of $20 million to support its metabolic disease treatment programs [1][5]. Offering Details - The shares are priced at $1.05 each, with each share sold together with one Tranche A warrant (2-year term) and one Tranche B warrant (5-year term) [2]. - The exercise price for both warrant tranches is set at $1.05 per share, and the warrants do not have variable priced resetting mechanisms or price-based anti-dilution features [2]. - The Tranche A warrants can be called by the company after the release of 3-month randomized midpoint clinical data from the ongoing REMAIN-1 study, contingent on certain conditions being met [3]. Additional Options - The underwriters have a 30-day option to purchase up to an additional 2,857,142 shares of common stock, along with associated warrants, at the public offering price [4]. Financial Projections - The company expects to receive approximately $20 million from this offering, with potential future proceeds of up to $40 million if the warrants are fully exercised for cash [5]. - The net proceeds will be utilized to support the Revita and Rejuva pipeline programs, as well as for working capital and other general corporate purposes [5]. Company Background - Fractyl is focused on innovative treatments for metabolic diseases, including obesity and type 2 diabetes, aiming to shift from chronic symptomatic management to durable disease-modifying therapies [9]. - The company holds a robust intellectual property portfolio, with 32 granted U.S. patents and around 40 pending U.S. applications, alongside numerous foreign patents [9].

Core Viewpoint - Fractyl Health, Inc. is planning to conduct an underwritten public offering of its common stock and pre-funded warrants to raise capital for its pipeline programs and general corporate purposes [1][2]. Group 1: Offering Details - The company intends to sell shares of its common stock and pre-funded warrants, with each pre-funded warrant priced slightly lower than the common stock price [1]. - Fractyl expects to grant underwriters a 30-day option to purchase up to an additional 15% of the offered shares at the public offering price [1]. - The offering is subject to market conditions, and there is no assurance regarding its completion or the final terms [1]. Group 2: Use of Proceeds - The net proceeds from the offering will be used to support the Revita and Rejuva pipeline programs, along with working capital and other general corporate purposes [2]. Group 3: Company Overview - Fractyl Health focuses on innovative treatments for metabolic diseases, particularly obesity and type 2 diabetes, aiming to shift from chronic management to disease-modifying therapies [5]. - The company holds a robust intellectual property portfolio, including 32 granted U.S. patents and approximately 40 pending applications [5]. - Fractyl is headquartered in Burlington, Massachusetts, and aims to redefine metabolic disease treatment [5].

Core Insights - Fractyl Health, Inc. (NASDAQ: GUTS) is currently positioned with a classic biotech setup, indicating potential for growth and investment opportunities [1] - The company faces a near-term catalyst and has a floor level valuation, suggesting that the current market prices may not fully reflect its intrinsic value [1] - There is an asymmetric risk-reward profile, which indicates that the potential upside may outweigh the risks involved [1] - Investor anxiety is evident due to the company's need for a capital raise within the year, which could impact market perception and stock performance [1]

Core Insights - Fractyl Health, Inc. announced positive 3-month data from the REVEAL-1 Cohort of its REMAIN-1 pivotal study, indicating that Revita may help individuals maintain or lose weight after discontinuing GLP-1 drugs, suggesting a potential for durable, drug-free weight maintenance [2][3][5] Group 1: Study Findings - In the REVEAL-1 Cohort, 12 of 13 participants either maintained or lost weight at 3 months, with 6 participants losing additional weight after stopping GLP-1 therapy and undergoing the Revita procedure [1][7] - The median weight change was stable at 0.46% (~1 pound), significantly lower than the expected 5-6% weight regain (10-15 pounds) after stopping GLP-1 therapy [1][7] - The Revita procedure demonstrated excellent tolerability, with treatment-emergent adverse effects being infrequent, mild, and transient [1][7][9] Group 2: Participant Profile - The REVEAL-1 Cohort included 22 participants, with 3-month follow-up data available for 13 individuals, averaging 49 years of age, and a gender distribution of 11 women and 2 men [4] - Participants had previously been treated with GLP-1 therapy for 5 months to 3 years, achieving a median total body weight loss of 20.9% while on therapy [4] Group 3: Future Expectations - Randomized Midpoint Cohort data is expected in Q3 2025, with pivotal cohort data anticipated in H2 2026, aimed at demonstrating Revita's potential for weight maintenance after GLP-1 discontinuation [2][9] - The company emphasizes the significant unmet need in obesity treatment, particularly the ability for patients to stop GLP-1 drugs without regaining weight [5][10] Group 4: Revita's Mechanism - Revita is designed to remodel the duodenal lining via hydrothermal ablation to reverse damage caused by chronic high-fat and high-sugar diets, addressing root causes of metabolic disease [11] - The product has received U.S. FDA Breakthrough Device designation for weight maintenance in individuals who discontinue GLP-1 based drugs [11]

Core Insights - Fractyl Health's Rejuva platform shows promise as a one-time, durable therapy for obesity and type 2 diabetes (T2D), demonstrating a favorable toxicity profile in preclinical studies [1][2][4] - The mechanism of action for Rejuva is distinct from systemic GLP-1 receptor agonists, allowing for nutrient-responsive secretion that activates only under metabolic stress [2][3] - Preliminary clinical data for RJVA-001, the first clinical candidate from the Rejuva platform, is expected in 2026, pending regulatory authorization [5][11] Key Findings - A single dose of Rejuva in a study with mice resulted in a 20% reduction in body weight and a 38% decrease in blood glucose levels by day 21, effects maintained despite continued high-fat diet exposure [7] - Rejuva-treated lean animals showed no weight gain or hyperglycemia when switched to a high-fat diet, maintaining baseline body weight and showing an 8% reduction in blood glucose [7] - The treatment was well-tolerated with no signs of toxicity or excessive weight loss in healthy animals, reinforcing the self-limiting nature of Rejuva's mechanism [7] Momentum Toward the Clinic - Fractyl Health has completed key in vivo studies for RJVA-001 and anticipates dosing the first patients in 2026, aiming for a first-in-class gene therapy that reprograms the pancreas for natural metabolic control [5][11] Scientific Validation - The study was conducted by a team from Fractyl Health and the University of Michigan, including experts in metabolic diseases, highlighting the scientific momentum behind Rejuva's approach [6][8]