UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On August 14, 2024, Fractyl Health, Inc. announced its financial results for the quarter ended June 30, 2024 and provided a corporate update. A copy of the press release in connection with the announcement is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in Item 2.02 of this Current Report (including Exhibit 99.1 attached hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly provided by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit relates to Item 2.02 and shall be deemed to be furnished, and not filed:
Exhibit No. |
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Description |
99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Fractyl Health, Inc. |
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Date: |
August 14, 2024 |
By: |
/s/ Harith Rajagopalan |
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Harith Rajagopalan, M.D., Ph.D. |
Exhibit 99.1
Fractyl Health Reports Second Quarter 2024 Financial Results and Provides Business Updates
Updated clinical results from German Real-World Registry demonstrate potential for Revita® to meaningfully sustain weight loss and lower blood sugar for at least one-year post-treatment in a real-world setting
Granted U.S. FDA Breakthrough Device designation for Revita in weight maintenance after discontinuation of GLP-1 based drugs
REMAIN-1 pivotal study for Revita in weight maintenance now initiated with anticipated data readouts beginning in Q4 2024
REVITALIZE-1 on-track to report topline data in mid-2025 in expanded Type 2 Diabetes patient population
Presented head-to-head preclinical data comparing Rejuva® versus semaglutide in #1 abstract at ADA 2024
Conference call today at 4:30 p.m. ET
BURLINGTON, Mass, August 14, 2024 (GLOBE NEWSWIRE) – Fractyl Health, Inc. (Nasdaq: GUTS) (“the Company”), a metabolic therapeutics company focused on pioneering new approaches that treat root causes of obesity and Type 2 Diabetes (T2D), today reported its second quarter 2024 financial results and provided business updates.
“GLP-1 drugs have demonstrated impressive results in clinical studies. However, we are seeing that a majority of patients stop taking GLP-1 drugs within one year of starting them and are at risk of rapid weight regain and loss of hard-won benefits,” said Harith Rajagopalan, M.D., Ph.D., Co-founder and Chief Executive Officer of Fractyl. “These limitations extend to almost all drugs in the class and has created an urgent need for a durable solution to weight maintenance for a growing number of patients. We are proud to be pioneers in addressing this unmet need, which led us to accelerate our Revita weight maintenance study, REMAIN-1. We believe the recent FDA Breakthrough Device designation for Revita underscores our differentiated approach to the weight maintenance problem and provides further validation for this platform. This quarter we were also pleased to share new preclinical data showing that our Rejuva GLP-1 pancreatic gene therapy platform can durably improve body composition and blood sugar compared to semaglutide, and prevent weight regain after stopping semaglutide. This abstract was chosen as the top submission at this year’s American Diabetes Association (ADA)’s meeting.”
Dr. Rajagopalan continued, “Across the Company, we have had strong execution through the first half of the year and are now entering what we believe to be a transformational period for Fractyl. We have significant upcoming milestones across both Revita and Rejuva which will be foundational to our goal of developing potentially one-time, disease-modifying solutions in the pursuit of durable improvement in obesity and T2D.”
Recent Highlights and Upcoming Milestones
Revita®
Upcoming Milestones:
Rejuva®
Upcoming Milestones:
Corporate Updates
Second Quarter 2024 Financial Results
Revenue: Revenue in each of the quarters ended June 30, 2024 and 2023 was generated from the Company's pilot commercial launch in Germany.
R&D Expenses: Research and development expense was $16.8 million for the quarter ended June 30, 2024, compared to $9.1 million for the same period in 2023. The increase was primarily due to the initiation of REMAIN-1, the progress made in REVITALIZE-1, continued development of the Rejuva program and increased personnel-related expenses, including stock-based compensation.
SG&A Expenses: Selling, general and administrative expenses were $6.2 million for the quarter ended June 30, 2024, compared to $2.8 million for the same period in 2023. The increase was primarily due to professional service expenses and other costs associated with operating as a publicly-traded company, and increased personnel-related expenses, including stock-based compensation.
Net Loss: Net loss was $17.2 million for the quarter ended June 30, 2024, compared to a net loss of $30.2 million for the same period in 2023. The decrease in net loss was primarily attributed to the change in fair value of notes payable and warrant liabilities as well as increased interest income, offset by the increase of in operating expenses discussed above.
Cash Position: As of June 30, 2024, Fractyl had approximately $102.4 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 into the fourth quarter of 2025.
Webcast and Conference Call Information
Fractyl will host a conference call to discuss its second quarter 2024 financial results and provide business updates on Wednesday, August 14, 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 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. It has US FDA Breakthrough Device designation in weight maintenance for people with obesity who discontinue GLP-1 based drugs, as well as in insulin-treated T2D. A pivotal study of Revita in weight maintenance for patients with obesity after discontinuation of GLP-1-based drugs, called REMAIN-1, is underway with anticipated data readouts from the open-label study in weight maintenance in the fourth quarter of 2024 and an anticipated mid-point analysis of the REMAIN-1 in the second quarter of 2025. A pivotal study of Revita in patients with T2D who are inadequately controlled on any glucose lowering agent, REVITALIZE-1, is currently enrolling in the United States and Europe.
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, and results of clinical enrollment and any clinical studies or readouts, the content, information used for, timing or results of any IND-enabling studies or IND applications, the potential launch or commercialization of any of our product candidates or products, the potential treatment population for any of our product candidates or products, 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, and the timing of any of the foregoing. 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 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 August 14, 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 Contact
Lisa Davidson, Chief Financial Officer
ir@fractyl.com, 781.902.8800
Media Contact
Jessica Cotrone, Corporate Communications
jcotrone@fractyl.com. 978.760.5622
Investor Contact
Stephen Jasper Gilmartin Group
stephen@gilmartinir.com, 619.949.3681
Fractyl Health, Inc.
Selected Condensed Consolidated Balance Sheet Data
(in thousands)
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June 30, |
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December 31, |
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(Unaudited) |
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Cash and cash equivalents |
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$ |
102,439 |
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$ |
33,209 |
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Restricted cash |
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4,570 |
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4,570 |
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Working capital (1) |
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92,274 |
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24,460 |
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Total assets |
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146,437 |
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76,212 |
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Notes payable, long-term |
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28,368 |
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55,152 |
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Total liabilities |
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75,682 |
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113,944 |
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Convertible preferred stock |
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— |
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287,330 |
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Total stockholders’ equity (deficit) |
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70,755 |
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(325,062 |
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(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)
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenue |
$ |
43 |
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$ |
72 |
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$ |
76 |
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$ |
77 |
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Cost of goods sold |
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24 |
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47 |
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43 |
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50 |
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Gross profit |
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19 |
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25 |
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33 |
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27 |
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Operating expenses: |
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Research and development |
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16,762 |
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9,141 |
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31,186 |
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18,490 |
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Selling, general and administrative |
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6,242 |
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2,759 |
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13,374 |
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5,519 |
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Total operating expenses |
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23,004 |
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11,900 |
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44,560 |
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24,009 |
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Loss from operations |
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(22,985 |
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(11,875 |
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(44,527 |
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(23,982 |
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Other income (expense), net: |
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Interest income, net |
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1,375 |
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154 |
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2,473 |
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571 |
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Change in fair value of notes payable |
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(304 |
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(18,365 |
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6,382 |
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(18,611 |
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Change in fair value of warrant liabilities |
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4,703 |
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(129 |
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15,149 |
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(134 |
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Other expense (income), net |
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(18 |
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(17 |
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(28 |
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(8 |
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Total other income (expense), net |
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5,756 |
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(18,357 |
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23,976 |
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(18,182 |
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Net loss and comprehensive loss |
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(17,229 |
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(30,232 |
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(20,551 |
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(42,164 |
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