FRACTYL HEALTH, INC. (GUTS)·Q3 2024 Earnings Summary

Executive Summary

• Q3 2024 was primarily a clinical and operational execution quarter: Revita pivotal programs progressed (REMAIN-1 enrollment sufficient for midpoint analysis; REVEAL-1 first open-label data expected beginning Q4 2024), and Rejuva advanced toward CTA-enabling completion by year-end .
• Financials reflected development-stage profile: revenue was $0.014M (Germany pilot), net loss was $23.2M, and cash/cash equivalents were $84.7M, with runway into Q4 2025 based on current plans .
• Key near-term catalysts: initial REVEAL-1 weight maintenance data by year-end, Germany registry expansion updates in Q1 2025, and REMAIN-1 midpoint analysis (randomized) in Q2 2025; mid-2025 topline for REVITALIZE-1 in T2D .
• Management framed Revita and Rejuva as a differentiated “weight maintenance” category amid concerns about GLP-1 durability, real-world effectiveness, and payer value; tone confident and focused on milestone execution .

What Went Well and What Went Wrong

What Went Well

• Completed enrollment sufficient for REMAIN-1 midpoint analysis; initial REVEAL-1 open-label cohort data expected to begin in Q4 2024, positioning multiple upcoming clinical catalysts .
• Presented real-world and pooled clinical data showing durable weight maintenance post-Revita across Germany registry and ObesityWeek (1-year maintenance in pooled analysis), reinforcing the weight maintenance strategy .
• Rejuva advanced: CTA-enabling in vivo studies progressing with durability, dose-ranging efficacy, and safety/biodistribution underway; nomination of RJVA-002 (smart GIP/GLP-1) expands pipeline scope .

Specific quotes:

• “We are announcing today that we have already completed enrollment of a sufficient number of patients for the midpoint analysis of [REMAIN-1]… and we continue to expect to report this midpoint analysis in Q2 2025.”
• “At DGVS, we presented clinical results from our German real-world registry, showing that Revita can deliver sustainable weight loss… for up to 1 year post procedure.”
• “We anticipate completing these key CTA-enabling studies by the end of the year. And if the CTA is approved, we plan to initiate a first-in-human study for Rejuva001 in the first half of 2025.”

What Went Wrong

• Operating expenses increased materially YoY, driven by R&D for pivotal studies and Rejuva, widening net loss to $23.2M vs $15.7M YoY; SG&A remained elevated with public company costs .
• Revenue remains de minimis ($0.014M), limited to Germany pilot; no commercial scaling yet beyond controlled expansion plans, constraining visibility on operating leverage .
• Consensus estimates unavailable (SPGI request limit), limiting formal beat/miss assessment; investors will need to anchor near-term narrative on clinical milestones rather than P&L metrics [GetEstimates errors].

Financial Results

Revenue source note:

• Revenue in Q1, Q2, and Q3 was generated from the pilot commercial launch in Germany; no segment breakdown disclosed .

KPIs (Germany Registry and Clinical Execution)

Guidance Changes

No financial guidance (revenue, margins, OpEx, tax) was issued; all guidance pertains to clinical milestones and operational timelines .

Earnings Call Themes & Trends

Management Commentary

• Strategic framing: “We are confident in our ability to continue to execute against our upcoming major value drivers… transform the treatment landscape in obesity and diabetes.”
• GLP-1 critique: “Poor durability, higher cost and absence of real-world clinical benefit… primary concern [for payers] is finding a way to deprescribe GLP-1s.”
• Revita positioning: “Revita is the only device or drug… to have obtained breakthrough device designation for a broad obesity indication.”
• Commercial vision: “Integrated obesity solution… best-in-class pharmacology; a Revita metabolic reset; and a diet and lifestyle program… unique opportunity for a compelling commercial model.”
• Rejuva thesis: “A onetime therapy that potentially has efficacy that can exceed that of semaglutide… lasting long enough to actually see effects on cardiovascular disease, kidney disease and diabetes prevention.”

Q&A Highlights

• REMAIN-1 midpoint design: 45 subjects, 2:1 Revita:sham, 12-week follow-up post-GLP-1 discontinuation; expectation that sham regains ~3% weight while Revita holds weight steady at 12 weeks; full study primary at 6 months .
• REVEAL-1 initial data: ~10 patients, at least 4 weeks follow-up; focus on “holding weight constant,” with trajectory vs expected control gain (~3% at 4 weeks) from SURMOUNT-4/STEP context .
• CTA timeline and studies: durability in wild-type mice (12 weeks), dose-ranging in DBDB model, safety/biodistribution in Yucatan pigs; complete CTA-enabling by year-end; file CTA in 1H25; first-in-human H1 2025 if approved .
• Germany expansion rationale: balance data generation and commercial experience at additional centers; spend discipline; aim to prove model of driving patients into Revita centers .
• RJVA-002: leverages same delivery catheter, AAV9, insulin promoter; RJVA-001 derisks 002; objective to combine GIP/GLP-1 for superior potency with better tolerability .

Estimates Context

• We attempted to retrieve Wall Street consensus (S&P Global) for Q3 2024 and forward (EPS, revenue, EBITDA, targets), but the SPGI API returned a daily request limit error. Consensus figures were therefore unavailable at the time of analysis; as a result, formal beat/miss vs consensus cannot be assessed and estimate comparison cells are marked N/A pending retrieval [GetEstimates errors].
• Given the de minimis revenue and development-stage operating profile, near-term estimate revisions are likely to be driven by clinical milestone timing (REVEAL-1, REMAIN-1 midpoint, REVITALIZE-1 topline) rather than P&L metrics .

Key Takeaways for Investors

• Weight maintenance category leadership: Revita is positioned as a differentiated, procedure-based off-ramp to GLP-1s amid growing recognition of durability and payer-value issues with injectables; Breakthrough designation is a regulatory advantage .
• Near-term catalysts: REVEAL-1 initial data by year-end and REMAIN-1 midpoint in Q2 2025 offer tangible data events that can reset sentiment and drive stock moves; REVITALIZE-1 topline mid-2025 adds a second major readout .
• Commercial readiness in Germany: Controlled expansion and reimbursement applications signal early go-to-market learning in a system analogous to the U.S., potentially de-risking launch pathways .
• Pipeline breadth: Rejuva progressing to CTA with the potential for a one-time, durable metabolic intervention; RJVA-002 nomination broadens obesity focus beyond GLP-1 alone .
• Financial runway: $84.7M cash supports execution into Q4 2025, but expense cadence suggests capital planning needed post pivotal readouts; watch for non-dilutive options or timing of financings .
• Trading view: Stock likely to react to REVEAL-1 signals on early weight trajectory vs expected rebound and to any midpoint analysis showing randomized treatment separation; downside risk is timeline slippage or inconclusive weight maintenance signal .
• Medium-term thesis: If Revita demonstrates durable maintenance post-GLP-1 discontinuation and REVITALIZE-1 shows T2D benefit, the platform could unlock a new procedural standard with payer-friendly economics and scalable endoscopy workflows .