FRACTYL HEALTH, INC. (GUTS)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 reflected continued investment behind pivotal programs: R&D $20.3M, SG&A $4.9M, net loss $25.0M; cash and equivalents ended at $67.5M with runway extended “into 2026” following a strategic focus on weight maintenance and pausing Revita T2D programs .
• Strong demand for REMAIN-1 weight maintenance study: >189 patients enrolled across 13 clinical sites within six months; midpoint analysis targeted for Q2 2025 and full enrollment expected in summer 2025—key upcoming catalysts .
• Rejuva gene therapy path advancing: first CTA module for RJVA-001 (T2D) planned for H1 2025; if authorized, preliminary human data expected in 2026 .
• Stock reaction catalysts: REVEAL-1 open-label data expected in Q1 2025, REMAIN-1 midpoint analysis in Q2 2025, and potential strategic partnerships given active dialogues with “major players” in obesity/metabolic care .

What Went Well and What Went Wrong

What Went Well

• Weight maintenance strategy gaining traction: >189 REMAIN-1 enrollments across 13 sites in six months; management emphasized “urgent demand” and momentum behind Revita .
• No procedural dropouts among randomized patients: “not a single patient” declined Revita after achieving the 15% weight loss threshold—supporting patient acceptance of the intervention .
• Rejuva regulatory alignment and preclinical progress: alignment with German regulators on first-in-human; device and drug modules advancing toward H1 2025 CTA submission; large-animal delivery safety demonstrated .

Management quote: “2025 will be a pivotal year – one that marks a major transformation in obesity and T2D treatment. We remain laser-focused on our efforts to deliver the innovations that will change the trajectory of these diseases for millions worldwide.”

What Went Wrong

• Operating expenses and net loss increased: Q4 net loss widened to $25.0M (vs. $23.2M in Q3) driven by R&D intensity and public company costs; minimal revenue remains non-core .
• Timing shift for REVEAL-1 updates: prior expectation to begin reporting open-label data in Q4 2024 moved to Q1 2025—minor delay but still near-term .
• Macro headwinds for GLP-1 coverage: public payers reassessing benefits versus costs (e.g., WV PEIA discontinuation), elevating uncertainty in obesity care pathways and highlighting the need for cost-effective long-term solutions .

Financial Results

Income Statement Highlights (USD Thousands)

Notes: EPS and share count disclosed for Q4; not provided in Q2/Q3 8-K exhibits .

Balance Sheet Highlights (USD Thousands)

Segment breakdown: Not applicable; revenue principally from German Real-World Registry pilot .

Program/Operational KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “The future of obesity care isn’t just about losing weight—it’s about keeping it off… we believe 2025 will be a pivotal year” — CEO Harith Rajagopalan .
• On REMAIN-1 demand: “In just 6 months, over 189 patients have enrolled across 13 clinical sites” .
• On procedure acceptance: “There’s not a single patient who has dropped out… every patient… has undergone that procedure” .
• On Rejuva’s mechanism: “Smart GLP-1… physiologically regulated expression… next generation of incretin therapy” .

Q&A Highlights

• Enrollment/randomization: Near 100 patients at or near the 15% loss threshold; no dropouts from undergoing Revita after randomization; midpoint timing remains Q2 2025 .
• REVEAL-1 disclosure: ~10 patients with ≥4 weeks follow-up; aiming to show weight held steady vs ~3% regain 4-week benchmark; expect more variability vs REMAIN .
• Rejuva CTA gating items: Device module preclinical verification plus in vivo testing; drug CMC assays/testing—first CTA module to be filed in H1 2025 .
• Partnerships: Active discussions with major players around commercialization potential contingent on data readouts .
• Biomarkers: Gathering blood sugar, cardiovascular parameters, and leptin; additional data to be shared later in 2025 .
• Payers: Growing “groundswell” for holistic, cost-effective obesity solutions; value proposition to be articulated with REMAIN data .

Estimates Context

• Wall Street consensus (S&P Global) for quarterly EPS and revenue was unavailable due to data access limits at time of query; therefore, estimate vs. actual comparisons cannot be provided in this recap. Analysts may need to adjust opex trajectories and cash runway assumptions given Q4 spend and strategic reprioritization extending runway into 2026 .
• Consensus recommendation/target price context similarly unavailable at this time.

Key Takeaways for Investors

• Near-term catalysts: REVEAL-1 open-label cohort update (Q1 2025) and REMAIN-1 midpoint analysis (Q2 2025) can validate Revita’s role in maintaining weight post-GLP-1 discontinuation—key stock drivers .
• Strategic focus enhances durability narrative: Pausing Revita T2D programs concentrates resources on weight maintenance, extending runway into 2026 and sharpening the PMA path if pivotal data succeed .
• Patient acceptance is high: No observed procedural dropouts among randomized patients—a positive signal for eventual uptake if approved .
• Macro backdrop favors durable, cost-effective solutions: Payer pressure on GLP-1 costs and weak real-world durability highlight Revita’s potential off-ramp positioning .
• Rejuva creates medium-term optionality: Progress toward CTA filing with supportive large-animal data introduces a second, differentiated modality that could expand the addressable market in T2D/obesity .
• Watch cash discipline vs. milestones: Q4 cash of $67.5M and runway into 2026 reduce financing risk through key readouts; ongoing opex intensity reflects execution against pivotal datasets .
• Potential partnership leverage: Active dialogues with major players suggest strategic interest; strong data could accelerate commercial pathways .