Fractyl Health (GUTS) Q1 2025 Earnings Call May 13, 2025 04:30 PM ET Speaker0 Good afternoon, and welcome to Fractal Health's First Quarter twenty twenty five Financial Results and Business Updates Call. As a reminder, this conference call is being recorded. At this time, all participants are in listen only mode. There will be a question and answer session following management's prepared remarks. I'll now turn the call over to Brian Lucay, Head of Investor Relations and Corporate Development at Fractal. Bri ...

Exhibit 99.1 Fractyl Health Announces First Quarter 2025 Financial Results and Business Updates REVEAL-1 Cohort 3-month open-label data update expected in June 2025; early clinical signals reinforce Revita's potential to maintain weight loss after GLP-1 discontinuation in the real world REMAIN-1 Midpoint Cohort data expected in Q3 2025; first randomized data on post-GLP-1 weight maintenance REMAIN-1 Pivotal Cohort has completed enrollment ahead of schedule; 6-month primary endpoint data anticipated in H2 20 ...

REVEAL-1 Cohort 3-month open-label data update expected in June 2025; early clinical signals reinforce Revita’s potential to maintain weight loss after GLP-1 discontinuation in the real world REMAIN-1 Midpoint Cohort data expected in Q3 2025; first randomized data on post-GLP-1 weight maintenance REMAIN-1 Pivotal Cohort has completed enrollment ahead of schedule; 6-month primary endpoint data anticipated in H2 2026 Rejuva gene therapy platform advancing toward first-in-human studies; first CTA module submis ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to ___________________ Commission File Number: 001-41942 Fractyl Health, Inc. (Exact Name of Registrant as Specified in its Charter) (State ...

BURLINGTON, Mass., April 28, 2025 (GLOBE NEWSWIRE) -- Fractyl Health, Inc. (Nasdaq: GUTS) (“the Company”), a metabolic therapeutics company focused on pattern-breaking approaches to treat the root causes of obesity and type 2 diabetes (T2D), today announced that it will deliver an oral presentation of compelling preclinical data from its Rejuva single-administration Smart GLP-1 pancreatic gene therapy platform at the American Society of Gene and Cell Therapy (ASGCT) 2025 Annual Meeting, taking place May 13- ...

Financial Data and Key Metrics Changes - In Q4 2024, revenue was generated from the commercial pilot in Germany, contributing to the financial position of the company [33] - Research and development expenses increased to $20.3 million in Q4 2024 from $10.1 million in Q4 2023, primarily due to progress in clinical studies and increased personnel-related expenses [34] - Selling, general and administrative expenses rose to $4.9 million in Q4 2024 from $2.8 million in Q4 2023, attributed to costs associated with being a publicly traded company [34] - The net loss for Q4 2024 was $25 million, compared to a net loss of $19.2 million in Q4 2023, mainly due to increased operating expenses [35] - As of December 31, 2024, the company had approximately $67.5 million in cash and cash equivalents, expected to fund operations through key clinical milestones into 2026 [36] Business Line Data and Key Metrics Changes - The Revita program is focused exclusively on weight maintenance post GLP-1 withdrawal, with the REMAIN-1 pivotal study prioritized [14] - Over 189 patients have enrolled in the REMAIN-1 study across 13 clinical sites, indicating strong demand for effective off-ramps from GLP-1 therapy [14] - Initial results from the REVEAL-1 cohort showed a patient maintaining weight loss during a challenging period, suggesting potential effectiveness of the Revita procedure [15] Market Data and Key Metrics Changes - The obesity market is under pressure, with over 70% of U.S. adults affected, leading to an estimated $170 billion in annual medical costs [16] - Public payers are reassessing coverage for GLP-1 treatments due to rising costs, with some states discontinuing coverage [17] Company Strategy and Development Direction - Fractyl aims to lead in the obesity treatment market by providing durable solutions for weight maintenance, focusing on both Revita and Rejuva platforms [37] - The company plans to leverage relationships with GI endoscopists to build a scalable commercial model for Revita [25] - The Rejuva platform is designed for physiologically regulated expression of GLP-1, aiming to reshape treatment paradigms in metabolic disease [27] Management's Comments on Operating Environment and Future Outlook - Management believes 2025 will be a pivotal year, with expectations for key clinical milestones and regulatory filings [12] - The company is confident in its ability to deliver long-term metabolic health solutions, addressing significant unmet needs in obesity care [37] - There is a growing recognition among public payers of the need for effective obesity treatments, which is expected to enhance the value proposition of Fractyl's offerings [84] Other Important Information - The REMAIN-1 study is the first of its kind to evaluate the efficacy of the Revita procedure in sustaining weight loss after GLP-1 drug discontinuation [19] - The FDA has granted Breakthrough Device designation for Revita, highlighting its potential in the weight maintenance market [10] Q&A Session Summary Question: Update on REMAIN-1 midpoint analysis and patient dropout rates - Nearly 100 patients have achieved the prespecified 15% total body weight loss, with a substantial number randomized for the study, and no dropouts due to lack of interest in the procedure [44] Question: Expectations for REVEAL-1 data presentation - The company plans to share data from about 10 patients in the REVEAL-1 study, with a focus on translating findings to the REMAIN study [59] Question: Gating items for Rejuva CTA submission - The company is on track to submit the first CTA module in the first half of 2025, with necessary preclinical verification testing and final testing ongoing [53] Question: Update on the first patient in REVEAL-1 - No additional information is available at this time, but the company plans to follow up with longer-term data on the patient [69] Question: Plans for strategic partnerships for commercialization - The company is in discussions with major players in the space regarding potential collaborations to bolster commercialization efforts [71] Question: Data collection for REVEAL-1 and weight regain analysis - The company is collecting various biomarker data and expects to share findings later in the year, with weight regain not significantly dependent on the specific GLP-1 drug used [79]

Developing Durable Therapies to Break the Pattern of Obesity This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the promise and potential impact of our preclinical or clinical trial data, the design, initiation, timing and results of cli ...

Financial Performance - Fractyl Health reported a net loss of $25.0 million for Q4 2024, compared to a net loss of $19.2 million in Q4 2023, reflecting a $12.2 million increase in operating expenses[12]. - Revenue for the three months ended December 31, 2024, was $3 million, a decrease from $7 million in the same period of 2023, while total revenue for the twelve months ended December 31, 2024, was $93 million compared to $120 million in 2023[24]. - Gross profit for the three months ended December 31, 2024, was $3 million, down from $5 million in the same period of 2023, with a total gross profit of $43 million for the twelve months ended December 31, 2024, unchanged from 2023[24]. - The net loss attributable to common stockholders for the three months ended December 31, 2024, was $24.97 million, compared to a loss of $23.51 million in the same period of 2023, with a total net loss of $70.43 million for the twelve months ended December 31, 2024, down from $94.27 million in 2023[24]. - The net loss per share attributable to common stockholders for the three months ended December 31, 2024, was $(0.52), compared to $(11.18) in the same period of 2023, with a total net loss per share of $(1.62) for the twelve months ended December 31, 2024, down from $(45.29) in 2023[24]. Operating Expenses - Total operating expenses for the three months ended December 31, 2024, increased to $25.2 million from $13 million in the same period of 2023, with total operating expenses for the twelve months reaching $93.6 million compared to $50.9 million in 2023[24]. - Research and development expenses for Q4 2024 were $20.3 million, up from $10.1 million in Q4 2023, primarily due to advancements in the REMAIN-1 clinical study[10]. - Selling, general and administrative expenses increased to $4.9 million in Q4 2024 from $2.8 million in Q4 2023, attributed to higher costs associated with being a publicly traded company[11]. - Research and development expenses for the three months ended December 31, 2024, were $20.28 million, significantly higher than $10.17 million in the same period of 2023, with total R&D expenses for the twelve months reaching $70.47 million compared to $38.04 million in 2023[24]. - Selling, general and administrative expenses for the three months ended December 31, 2024, were $4.93 million, up from $2.82 million in the same period of 2023, with total SG&A expenses for the twelve months at $23.1 million compared to $12.84 million in 2023[24]. Assets and Liabilities - Total assets increased to $108.1 million as of December 31, 2024, compared to $76.2 million in 2023, while total liabilities decreased to $79.7 million from $113.9 million[22]. - As of December 31, 2024, Fractyl had approximately $67.5 million in cash and cash equivalents, sufficient to fund operations through key clinical milestones into 2026[13]. Clinical Developments - The REMAIN-1 pivotal study has enrolled over 189 patients across 13 clinical sites within six months of initiation, indicating strong demand for weight maintenance solutions post-GLP-1 therapy[4]. - The company plans to submit the first Clinical Trial Application (CTA) module for RJVA-001 in type 2 diabetes in H1 2025, with preliminary data expected in 2026 if authorized[7]. - A midpoint data analysis for the REMAIN-1 study is anticipated in Q2 2025, with full enrollment expected by summer 2025[5]. - Fractyl's strategic focus has shifted to prioritize the REMAIN-1 study and the Rejuva gene therapy platform, pausing investments in other Revita programs for type 2 diabetes[8]. Other Financial Metrics - Interest income for the three months ended December 31, 2024, was $726,000, an increase from $463,000 in the same period of 2023, with total interest income for the twelve months at $4.15 million compared to $1.26 million in 2023[24]. - The change in fair value of warrant liabilities resulted in a gain of $466,000 for the three months ended December 31, 2024, compared to a loss of $5.63 million in the same period of 2023, with a total gain of $17.91 million for the twelve months compared to a loss of $6.79 million in 2023[24]. - The weighted-average number of common shares outstanding for the three months ended December 31, 2024, was 48,445,979, compared to 2,102,410 in the same period of 2023, with a total of 43,541,527 shares for the twelve months compared to 2,081,328 in 2023[24].

Core Insights - Fractyl Health is addressing the critical need for weight maintenance solutions post-GLP-1 therapy, with strong demand from patients and physicians for its REMAIN-1 study [2][4] - The company plans to submit the first Clinical Trial Application (CTA) module for RJVA-001 in type 2 diabetes in H1 2025, with preliminary data expected in 2026 if authorized [7][20] - 2025 is anticipated to be a pivotal year for Fractyl, with multiple key clinical milestones ahead [3] Company Developments - Fractyl Health reported significant progress in the REMAIN-1 pivotal study, enrolling over 189 patients across 13 clinical sites within six months [4] - The company has paused investment in its Revita programs for type 2 diabetes to focus exclusively on weight maintenance through the REMAIN-1 study [10] - The Revita product candidate aims to remodel the duodenal lining to reverse damage caused by high-fat and high-sugar diets, and has received U.S. FDA Breakthrough Device designation for weight maintenance [18] Financial Performance - For Q4 2024, Fractyl reported a net loss of $25.0 million, compared to a net loss of $19.2 million in Q4 2023, attributed to increased operating expenses [14] - Research and development expenses rose to $20.3 million in Q4 2024 from $10.1 million in Q4 2023, primarily due to advancements in the REMAIN-1 study [12] - As of December 31, 2024, the company had approximately $67.5 million in cash and cash equivalents, sufficient to fund operations through key clinical milestones into 2026 [15]

Financial Performance - The company incurred a net loss of approximately $77.1 million for the year ended December 31, 2023, and an accumulated deficit of approximately $415.3 million as of the same date[365]. - The company has not generated any significant revenue from product sales to date and has financed operations primarily through sales of convertible preferred stock and common stock[365]. - The company expects to continue incurring significant losses for the foreseeable future, with losses likely to increase substantially as it advances its product candidates[367]. - As of December 31, 2024, the company had approximately $67.5 million in cash and cash equivalents, which is insufficient to fund its current operating plan for at least twelve months[371]. - The company may need to seek additional funding through equity or debt financings, collaborations, or licensing arrangements, which could dilute stockholders[377]. - The company’s ability to raise additional capital may be affected by market conditions, potentially leading to dilution of existing stockholders[379]. Strategic Decisions - The company has paused investment in its Revita programs for Type 2 Diabetes (T2D), including the REVITALIZE-1 study and the Germany Real-World Registry study, as part of its Strategic Reprioritization announced on January 31, 2025[365][372]. - The company plans to use existing cash to fund the ongoing REMAIN-1 pivotal clinical study of Revita and the continued preclinical and clinical development of its Rejuva gene therapy candidate RJVA-001[376]. - The company has streamlined resources, resulting in a workforce reduction impacting 22 employees, or approximately 17% of its workforce[372]. Regulatory Environment - The PMA approval process for the Revita DMR procedure is expected to take from one to three years, requiring extensive data to demonstrate safety and effectiveness[390]. - The company is working on obtaining MDR certification for Revita, which is necessary for compliance to sell products in the EU[394]. - The FDA may require additional preclinical or clinical data for regulatory approval, which could delay or prevent commercialization plans[398]. - The regulatory approval pathway for product candidates may be uncertain, complex, expensive, and lengthy, with potential delays due to additional government regulations[399]. - The company must comply with the EU medical device vigilance system, which requires reporting serious incidents and corrective actions to relevant authorities[452]. - The company is subject to compliance with FDA's good manufacturing practice regulations, and non-compliance could result in sanctions that adversely affect operations[519]. Clinical Development - The company is currently in clinical-stage development of Revita and expects to initiate clinical development of the Rejuva PGTx candidate RJVA-001 along with a device delivery system[388]. - Clinical studies are expensive and time-consuming, and their outcomes are uncertain, which may lead to delays in obtaining regulatory approvals[402]. - The company plans to submit IDEs for its product candidates, but there is uncertainty regarding the timeline and approval of such submissions[411]. - The company may face significant financial costs and reduced revenue if clinical studies do not meet desired endpoints or produce useful data[410]. Market Challenges - The company anticipates that it will be several years before it has a commercialized product in the United States and generates significant revenue from product sales[366]. - The commercial success of Revita will depend on adequate coverage and reimbursement from governmental and private payors[426]. - The healthcare industry trend towards cost containment may affect the company's ability to sell products profitably if reimbursement levels decrease[430]. - The successful commercialization of product candidates may be hindered by unfavorable pricing regulations and inadequate third-party reimbursement policies, impacting profitability[547]. Competition and Market Dynamics - Competition in the medical device and biopharmaceutical markets is intense, with established companies having significant advantages in resources and market presence[481]. - The company may face challenges in recruiting effective sales personnel and persuading physicians to prescribe its product candidates[479]. - The addressable patient population estimates for the product candidates may prove to be inaccurate, potentially reducing market opportunity[492]. Intellectual Property - The company relies on a combination of patents, trademarks, and trade secrets to protect its intellectual property, which is critical for commercial success[559]. - The process of obtaining patent protection is expensive and time-consuming, with no assurance that pending applications will result in issued patents[560][561]. - The company may face challenges in maintaining patent protection in jurisdictions where it has not sought protection, allowing competitors to exploit its technologies[561]. Operational Risks - The company relies on third-party clinical investigators and CROs for preclinical and clinical studies, which poses risks if these parties fail to meet contractual obligations or regulatory requirements[499]. - The company is dependent on information technology systems for critical operations, and any failure could adversely affect business operations[496]. - The company may face significant costs and reputational harm from product liability claims related to defects in its product candidates[527]. Economic and Geopolitical Risks - The company may face risks related to unfavorable global economic conditions, including geopolitical events that could adversely affect its business and financial condition[380]. - The company anticipates that geopolitical events, such as the conflict between Ukraine and Russia, could adversely impact its business and supply chain[513].