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FRACTYL HEALTH, INC. (GUTS)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 showed minimal pilot revenue ($0.03M) and a narrowed net loss of $3.3M as non-cash fair value gains offset higher operating expenses; cash rose to $121.4M post-IPO, extending runway through key 2025 milestones .
  • Operating spend increased as programs advanced: R&D $14.4M (+54% YoY) and SG&A $7.1M (vs. $2.8M YoY) reflecting Revitalize-1/Remain-1 progress and public company costs .
  • Management highlighted 2024 catalysts: Revitalize-1 topline in 4Q24 and Remain-1 initiation in 2H24; they also discussed a potential PMA path for Revita based on Revitalize-1 if successful and outlined Rejuva development plans on the call .
  • Consensus estimates from S&P Global were unavailable at the time of analysis due to data access limits, so beat/miss cannot be assessed (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • Net loss narrowed to $3.3M from $11.9M YoY, driven by a $17.1M non-cash gain from decreases in fair value of notes payable and warrants and higher interest income (+$0.7M) .
  • Strong cash position: $121.4M cash and cash equivalents at 3/31/24; management believes this funds operations through expected milestones into 2025 .
  • Clinical momentum and commercial readiness: Revitalize-1 enrollment tracking to complete in 2Q24 with topline in 4Q24; Remain-1 pivotal to initiate in 2H24; appointed a Chief Commercial Officer to prepare for Revita launch readiness .

What Went Wrong

  • Operating expenses rose materially as programs advanced: R&D $14.4M (+$5.1M YoY) and SG&A $7.1M (+$4.3M YoY), increasing loss from operations to $(21.5)M from $(12.1)M YoY .
  • Revenue remains de minimis from the limited Germany pilot ($0.03M in Q1 2024; $0.12M for FY23), underscoring the pre-commercial stage and dependence on clinical/regulatory milestones .
  • Estimate comparisons are not available due to S&P Global access limits for this analysis window, limiting external performance benchmarking (see Estimates Context).

Financial Results

Metric (USD, $000s unless noted)Q1 2023Q4 2023Q1 2024
Revenue$5 $7 $33
Cost of Goods Sold$3 $2 $19
Gross Profit$2 $5 $14
R&D Expense$9,349 $10,166 $14,424
SG&A Expense$2,760 $2,820 $7,132
Total Operating Expenses$12,109 $12,986 $21,556
Loss from Operations$(12,107) $(12,981) $(21,542)
Total Other Income (Expense), Net$175 $(6,199) $18,220
Net Loss$(11,932) $(19,180) $(3,322)
Cash & Cash Equivalents (period-end)N/A$33,209 $121,441

Notes: The company did not report EPS in the press release tables. Gross margin % not disclosed.

Segment breakdown: Not applicable (pilot-stage revenue only) .

KPIs and Clinical Metrics (Revita Real-World Registry)

KPIQ4 2023 ReferenceQ1 2024 Update
Patients treated / enrolledAs of Mar 15, 2024: 29 treated; 24 enrolled As of Apr 15, 2024: 33 treated; 26 enrolled
3-month outcomesMedian HbA1c: 9.2%→7.3% (−1.9%); Weight: −17.6 lbs (n=14) HbA1c reduction >1%; Weight reduction >15 lbs (n=19); 95% stable/reduced ADAs; 4 stopped ≥1 ADA; 2 discontinued all ADAs
6-month outcomes—Avg % body weight loss >8% (n=14); median HbA1c from 9.2%→7.6%
Patient-reported outcomes—90% would undergo Revita again; 95% would recommend
Safety—No device/procedure-related SAEs to date

Guidance Changes

MetricPeriodPrevious Guidance (Q4/FY23 PR, Apr 1, 2024)Current Guidance (Q1 2024 PR, May 13, 2024)Change
Revitalize-1 enrollment completion1H 2024Complete enrollment in 1H 2024; topline in 4Q 2024 Complete enrollment in 2Q 2024; topline in 4Q 2024 Maintained timeline (narrowed to 2Q)
Remain-1 initiation (pivotal; post-GLP-1 weight maintenance)2H 2024IDE approved; initiate in 2H 2024; Reveal-1 updates in 2H 2024 Initiation in 2H 2024; Reveal-1 open-label data updates in 2H 2024 Maintained
RJVA-001 IND-enabling2H 2024Complete IND-enabling in 2H 2024; first-in-human 1H 2025 (pending clearance) Complete IND-enabling in 2H 2024; first-in-human 1H 2025 (pending clearance) Maintained
Cash runwayThrough 2025Existing cash + IPO proceeds sufficient through 2025 Cash sufficient to fund operations through expected milestones through 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2024 Call)Trend
Revitalize-1 PMA pathwayFocus on completing enrollment and 4Q24 topline; U.S./EU pivotal enrolling Discussed study design with FDA; if successful, data may support PMA for Revita to improve glycemic control in T2D on insulin More explicit on regulatory path
Remain-1 design/retentionIDE approved; initiation 2H24; Reveal-1 to provide updates Endpoint set at 24 weeks to mitigate control-arm dropout; considering crossover for control to improve retention Greater detail on design/stat plan
Reveal-1 open-labelPlanned updates in 2H24 Enrollment to include patients already on GLP-1s wishing to discontinue; cites cost concerns (KFF poll) as real-world context Clearer real-world positioning
Rejuva platformRJVA-001 nominated; IND-enabling in 2H24 Obesity candidate likely requires higher serum levels than T2D; RJVA-002 planned; platform leverages same delivery/vector/backbone with transgene optionality Expanding pipeline strategy
Commercial readinessCCO hire planned as platform advancesAppointed CCO to lead launch readiness for Revita Team build-out accelerating

Management Commentary

  • “In the second half of 2024 we expect to initiate the Remain-1 pivotal study for weight maintenance… We also anticipate topline data from the Revitalize-1 pivotal study in patients with inadequately controlled T2D in the fourth quarter of 2024.” — Harith Rajagopalan, CEO .
  • “We have discussed this study design with the FDA and believe that, successful, the data may support PMA for Revita to improve glycemic control in patients with type 2 diabetes who are inadequately controlled on insulin.” — Management on the call .
  • “We have made a decision to seek a primary endpoint at 24-weeks rather than at 48-weeks, and we are considering whether to offer Revita to those patients who did not get the treatment as a crossover in order to help keep them in the study.” — Management on Remain-1 retention/timing .

Q&A Highlights

  • Regulatory path: Management indicated Revitalize-1’s design has been discussed with FDA and, if successful, could support PMA for Revita in T2D inadequately controlled on insulin, clarifying potential approvability and label intent .
  • Remain-1 trial execution: To address expected differential dropout, primary endpoint set at 24 weeks and a crossover option for controls is being considered to enhance retention .
  • Real-world demand: Reveal-1 open-label cohort will include patients already on GLP-1s who wish to discontinue; management referenced consumer cost concerns as motivation, reinforcing the post-GLP-1 weight maintenance thesis .
  • Rejuva development: Obesity-focused candidate (e.g., RJVA-002) may target higher serum GLP-1 levels than T2D; same delivery/vector/backbone with transgene tailoring to optimize weight loss .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable for this analysis due to data access limits encountered during retrieval; as a result, we cannot assess beats/misses for revenue or EPS in Q1 2024 at this time. We searched S&P Global estimates for Q1 2024 but hit a daily request limit; no alternative official consensus source was used in order to maintain consistency with S&P Global data [GetEstimates error].
Consensus vs. Actual (USD)Q1 2024 Consensus (S&P Global)Q1 2024 Actual
RevenueN/A (unavailable)$33,000
EPSN/A (unavailable)Not disclosed in press release tables

Key Takeaways for Investors

  • Near-term catalysts remain intact: Revitalize-1 topline in 4Q24 and Remain-1 initiation in 2H24 are the principal stock drivers; successful Revitalize-1 could underpin a PMA submission for Revita in T2D inadequately controlled on insulin .
  • Cash runway strengthened to support execution through 2025 milestones, reducing near-term financing overhang risk relative to program readouts .
  • Operating expense growth reflects program acceleration and public company status; investors should expect continued elevated R&D as Remain-1 ramps and Rejuva advances .
  • Real-world and registry data show encouraging metabolic signals (HbA1c and weight) and patient satisfaction, supporting the clinical rationale for Revita and the post-GLP-1 weight maintenance strategy .
  • Estimate benchmarking is pending due to data access limits this period; upcoming quarters should be framed against S&P Global consensus once available to gauge execution vs. Street.
  • Trading lens: Expect shares to be catalyst-driven into 4Q24 (Revitalize-1 topline) and 2H24 (Remain-1 kickoff/Reveal-1 updates); regulatory tone from the call adds optionality to the Revita thesis if endpoints are met .

Additional Notes on Source Review

  • Primary documents read in full: Q1 2024 8‑K/press release (Item 2.02, Exhibit 99.1) on May 13, 2024 and Q4/FY23 8‑K/press release on April 1, 2024 .
  • Q1 2024 earnings call transcript was accessed via Seeking Alpha due to an internal document retrieval issue; quotes and themes were drawn from that source .
  • We searched for the prior two quarters’ earnings; Q4 2023 was available via 8-K press release -. No internal 8-K 2.02 was found for Q3 2023 (company not yet public); we did not identify a Q3 2023 earnings release in the internal catalog [ListDocuments result: none].