Fractyl Health, Inc. (Nasdaq: GUTS) (the “Company”), a metabolic
therapeutics company focused on pioneering new approaches for the
treatment of obesity and type 2 diabetes (T2D), today reported its
first quarter 2024 financial results and provided business updates.
“As I reflect on our first quarter as a public company, I
am incredibly excited about the progress we have made as an
organization to provide potentially game-changing therapies to
patients with obesity and T2D. In the second half of 2024 we expect
to initiate the Remain-1 pivotal study for weight maintenance, as
well as report study updates from the open-label cohort, Reveal-1.
We also anticipate topline data from the Revitalize-1 pivotal study
in patients with inadequately controlled T2D in the fourth quarter
of 2024,” said Harith Rajagopalan, M.D., Ph.D., co-founder and
Chief Executive Officer of Fractyl. “And, as we look ahead to
later-stage development, we strengthened our team with the addition
of Adrian Kimber as Chief Commercial Officer. We believe we have
the resources and leadership in place to advance our portfolio of
product candidates that have the potential to help us achieve our
mission of developing transformative therapies that can prevent and
hopefully cure metabolic disease.”
Recent Highlights and Upcoming Milestones
Revita®
The Revita DMR system is an endoscopic outpatient procedural
therapy designed to durably modify duodenal dysfunction, and
improve metabolic health, blood glucose levels, and weight in
patients with inadequately controlled T2D.
- In May 2024, Fractyl provided a clinical update from its
ongoing real-world registry study of Revita in patients with T2D at
the German Diabetes Association (DDG) Annual Meeting in Berlin,
Germany.
- As of April 15, 2024, the Company has treated 33 patients with
DMR and enrolled 26 patients in the registry study with interim
follow-up data from 19 patients. At three months post-procedure,
the Company observed a reduction from median baseline HbA1c of
greater than 1% and a reduction from baseline weight of greater
than 15 pounds. Of the 19 patients, 95% remained stable or reduced
their prescribed ADAs, 4 patients stopped at least one prescribed
ADA, and of those, 2 patients discontinued all their previously
prescribed ADAs. Patient related outcomes (PROs) questionnaires
were provided to participants at 3 months follow up, with the
majority responding that they would undergo the Revita DMR
procedure again if it were necessary (90%) and would recommend the
procedure to a friend or relative (95%). At 6 months post-DMR
(n=14), average percent body weight loss was greater than 8% with
median HbA1c falling from 9.2 at baseline to 7.6%. The Company
believes these results suggest a significant overall improvement in
metabolic health. No device or procedure-related serious adverse
events have been reported to date.
- In March 2024, Fractyl received Investigational Drug Exemption
(IDE) approval from the U.S. Food and Drug Administration (FDA) to
initiate a two-part, parallel cohort Remain-1 study for weight
maintenance in patients with obesity who have lost at least 15%
total body weight on GLP-1RA therapy and wish to discontinue their
GLP-1RA without weight regain. In addition, the Company announced
Reveal-1, an open-label cohort that will follow a similar patient
population and management protocol with anticipated open-label data
updates as the study progresses.
Upcoming Milestones:
- Fractyl is currently enrolling patients in its pivotal
Revitalize-1 study in patients with inadequately controlled T2D
despite being on up to three ADAs and daily insulin. The Company
anticipates completing enrollment in the second quarter of 2024 and
expects to report topline data in the fourth quarter of 2024.
- Fractyl expects to initiate the Remain-1 randomized,
double-blind pivotal study for weight maintenance and begin
reporting updates for the open-label cohort, Reveal-1, in the
second half of 2024.
- Fractyl plans to continue enrolling patients in its Germany
Real-World registry and provide updates on an ongoing basis.
Rejuva®
Rejuva is a modular, physiologic gene therapy platform with
three key elements designed to enable successful pancreatic gene
therapy: (1) a proprietary delivery catheter designed to enable
local, low dose therapeutic delivery directly to the pancreas via
endoscopic access, (2) vectors with tropism for the pancreatic
islet to enable successful transduction and gene delivery with
limited biodistribution, and (3) transgenes with tissue-restricted
promoters and metabolically active peptides that can durably impact
glucose and weight control.
- In March 2024, Fractyl announced new results from its Rejuva
platform demonstrating potent and durable effects of a single dose
of a human GLP-1 pancreatic gene therapy transgene compared to
semaglutide in the db/db mouse model, the standard rodent T2D
efficacy model used for clinical development.
Upcoming Milestones:
- Fractyl intends to present new preclinical data on the
potential of Rejuva for weight maintenance during the 2024
Digestive Disease Week (DDW) Annual Meeting taking place May 18-24,
2024 in Washington, D.C.
- Fractyl expects to complete IND-enabling studies, or its
equivalent, for RJVA-001 in the second half of 2024. Pending
regulatory clearance, the Company intends to initiate its
first-in-human study in the first half of 2025.
- Fractyl plans to nominate its first GLP-1 PGTx candidate for
obesity in the second half of 2024.
Corporate Updates
- In April 2024, Fractyl announced the appointment of Adrian
Kimber as Chief Commercial Officer. Mr. Kimber brings over two
decades of commercial and operational experience across both the
biotechnology and medical device sectors, most recently serving as
Global Vice President and Commercial Head at BioTronik Neuro, a
leading provider of spinal cord stimulation devices.
First Quarter 2024 Financial Results
Revenue: Revenue in both quarters ended
March 31, 2024 and 2023 was generated from the Company's pilot
commercial launch in Germany that was initiated in the first
quarter of 2023.
R&D Expenses: Research and development
expense was $14.4 million for the quarter ended March 31,
2024, compared to $9.3 million for the same period in 2023. The
increase during the quarter was primarily due to increased
investment in Revitalize-1 Clinical Study, advancement of the
Rejuva program and increased personnel-related expenses, including
stock-based compensation.
SG&A Expenses: Selling, general and
administrative expense was $7.1 million for the quarter ended
March 31, 2024, compared to $2.8 million for the same period
in 2023. The increase was primarily due to increased
personnel-related expenses, including stock-based compensation and
professional services expenses and other costs associated with
operating as a publicly-traded company.
Net Loss: Net loss was $3.3 million for the
quarter ended March 31, 2024, compared to a net loss of $11.9
million for the same period in 2023. The decrease in net loss was
primarily related to a $17.1 million non-cash gain from a decrease
in fair value of notes payable and warrants, and a $0.7
million increase in interest income earned, offset by an increase
of $9.4 million in operating expenses.
Cash Position: As of March 31, 2024,
Fractyl had approximately $121.4 million in cash and cash
equivalents. Based on our current development plans, we believe
that our existing cash and cash equivalents will be sufficient to
fund our operations through expected key company milestones through
2025.
Webcast and Conference Call Information
Fractyl will host a conference call to discuss its first quarter
2024 financial results and provide business updates on Monday, May
13, 2024 at 4:30 p.m. ET. A live webcast of the conference call can
be accessed in the “Events” section of Fractyl’s website at
ir.fractyl.com. The webcast will be archived and available for
replay for at least 30 days after the event.
About Fractyl Health
Fractyl Health is a metabolic therapeutics company focused on
pioneering new approaches to the treatment of metabolic diseases,
including obesity and T2D. Despite advances in treatment over the
last 50 years, obesity and T2D continue to be rapidly growing
drivers of morbidity and mortality in the 21st century. Fractyl
Health’s goal is to transform metabolic disease treatment from
chronic symptomatic management to durable disease-modifying
therapies that target the organ-level root causes of disease.
Fractyl Health is based in Burlington, MA. For more information,
visit www.fractyl.com or www.twitter.com/FractylHealth.
About Revita
Fractyl Health’s lead product
candidate, Revita®, is based on the company’s insights surrounding
the potential role of the gut in obesity and T2D. Revita is
designed to remodel the duodenal lining via hydrothermal ablation
(i.e., duodenal mucosal resurfacing) to edit abnormal intestinal
nutrient sensing and signaling mechanisms that are a potential root
cause of metabolic disease. Revita has received a CE mark in Europe
and, in January 2022, received reimbursement authorization through
NUB in Germany for the treatment of T2D. In the United States,
Revita is for investigational use only under US law. A pivotal
study of Revita in patients with inadequately controlled T2D
despite multiple medicines and insulin, called Revitalize-1, is
currently enrolling in the United States and Europe. A pivotal
study of Revita in patients with obesity after discontinuation of
GLP-1 based drugs, called Remain-1, is anticipated to initiate in
H2 2024.
About Rejuva
Fractyl Health’s Rejuva® platform focuses on developing
next-generation adeno-associated virus (AAV)-based, locally
delivered gene therapies for the treatment of obesity and T2D. The
Rejuva platform is in preclinical development and has not yet been
evaluated by regulatory agencies for investigational or commercial
use. Rejuva leverages advanced delivery systems and proprietary
screening methods to identify and develop metabolically active gene
therapy candidates targeting the pancreas. The program aims to
transform the management of metabolic diseases by offering novel,
disease-modifying therapies that address the underlying root causes
of disease.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release 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 clinical enrollment and any clinical trials or
readouts, the potential launch or commercialization of any of our
product candidates or products, the sufficiency of our cash, cash
equivalents, and investments to fund our operating activities for
any specific period of time, and our strategic and product
development objectives and goals, including with respect to
enabling long-term control over obesity and type 2 diabetes without
the burden of chronic therapies. These statements are neither
promises nor guarantees, but involve known and unknown risks,
uncertainties and other important factors that may cause the
Company’s actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements, including, but not limited to, the following: the
Company’s limited operating history; the incurrence of significant
net losses and the fact that the Company expects to continue to
incur significant net losses for the foreseeable future; the
Company’s need for substantial additional financing; the Company’s
ability to continue as a going concern; the restrictive and
financial covenants in the Company’s credit agreement; the lengthy
and unpredictable regulatory approval process for the Company’s
product candidates; uncertainty regarding its clinical studies; the
fact that the Company’s product candidates may cause serious
adverse events or undesirable side effects or have other properties
that may cause it to suspend or discontinue clinical studies, delay
or prevent regulatory development, prevent their regulatory
approval, limit the commercial profile, or result in significant
negative consequences; additional time may be required to develop
and obtain regulatory approval or certification for the Company’s
Rejuva gene therapy candidates; the Company’s reliance on third
parties to conduct certain aspects of the Company’s preclinical
studies and clinical studies; the Company’s reliance on third
parties for the manufacture of the materials for its Rejuva gene
therapy platform for preclinical studies and its ongoing clinical
studies; the regulatory approval process of the FDA, comparable
foreign regulatory authorities and lengthy, time-consuming and
inherently unpredictable, and even if we complete the necessary
clinical studies, we cannot predict when, or if, we will obtain
regulatory approval or certification for any of our product
candidates, and any such regulatory approval or certification may
be for a more narrow indication than we seek; and the potential
launch or commercialization of any of Company’s product candidates
or products and our strategic and product development objectives
and goals, and the other factors discussed under the caption “Risk
Factors” in our Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission (the “SEC”) on May 13, 2024 and
in our other filings with the SEC. These forward-looking statements
are based on management’s current estimates and expectations. While
the Company may elect to update such forward-looking statements at
some point in the future, the Company disclaims any obligation to
do so, even if subsequent events cause its views to change.
Contacts
Corporate ContactLisa Davidson, Chief Financial
Officerir@fractyl.com, 781.902.8800
Media ContactBeth Brett, Corporate
Communicationsbbrett@fractyl.com, 720.656.6544
Investor ContactStephen JasperGilmartin
Groupstephen@gilmartinir.com, 619.949.3681
Fractyl Health, Inc.Selected Condensed Consolidated Balance
Sheet Data(in thousands)(Unaudited) |
|
|
March 31,2024 |
|
|
December 31,2023 |
|
Cash and cash equivalents |
|
$ |
121,441 |
|
|
$ |
33,209 |
|
Restricted cash |
|
|
4,570 |
|
|
|
4,570 |
|
Working capital (1) |
|
|
111,200 |
|
|
|
24,460 |
|
Total assets |
|
|
163,519 |
|
|
|
76,212 |
|
Notes payable, long-term |
|
|
28,695 |
|
|
|
55,152 |
|
Total liabilities |
|
|
79,341 |
|
|
|
113,944 |
|
Convertible preferred
stock |
|
|
— |
|
|
|
287,330 |
|
Total stockholders’ equity
(deficit) |
|
|
84,178 |
|
|
|
(325,062 |
) |
(1) Working
capital is defined as total current assets less total current
liabilities. |
Fractyl Health, Inc.Condensed Consolidated Statements of
Operations and Comprehensive Loss(in
thousands)(Unaudited) |
|
Three Months
EndedMarch 31, |
|
|
2024 |
|
|
2023 |
|
Revenue |
$ |
33 |
|
|
$ |
5 |
|
Cost of goods sold |
|
19 |
|
|
|
3 |
|
Gross profit |
|
14 |
|
|
|
2 |
|
Operating expenses: |
|
|
|
|
|
Research and development |
|
14,424 |
|
|
|
9,349 |
|
Selling, general and administrative |
|
7,132 |
|
|
|
2,760 |
|
Total operating expenses |
|
21,556 |
|
|
|
12,109 |
|
Loss from operations |
|
(21,542 |
) |
|
|
(12,107 |
) |
Other income (expense),
net: |
|
|
|
|
|
Interest income, net |
|
1,098 |
|
|
|
417 |
|
Change in fair value of notes payable |
|
6,686 |
|
|
|
(246 |
) |
Change in fair value of warrant liabilities |
|
10,446 |
|
|
|
(5 |
) |
Other expense (income), net |
|
(10 |
) |
|
|
9 |
|
Total other income (expense), net |
|
18,220 |
|
|
|
175 |
|
Net loss and comprehensive
loss |
|
(3,322 |
) |
|
|
(11,932 |
) |
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