Fractyl Health, which went public in February 2024, got some good and bad news on Monday as it secured an Investigational Device Exemption from the FDA for its Revita endoscopy system designed to maintain weight loss, but posted a $19.2 million net loss in the company’s most recent quarter.
The FDA’s Investigational Device Exemption (IDE) clears the way for a pivotal study of Fractyl’s Revita system designed to maintain weight loss after patients have stopped taking GLP-1 drugs. An outpatient endoscopic procedure, Revita targets the duodenum—which is just below the stomach—and reverse the pathology in the duodenal lining that is a root cause of obesity and type 2 diabetes.
Fractyl said that in prior studies of the device conducted on patients with type 2 diabetes, the analyses of data showed evidence to support the potential for weight maintenance after a single procedure.
With the IDE approved, Fractyl will begin the randomized, double blind Remain-1 study, a trial of Revita versus sham in patients who have lost at least 15% of their total body weight from taking tirzepatide. The trial is set to begin in the second half of this year.
The objectives of the study will be to demonstrate that Revita is superior to sham in the percent change in body weight from the baseline to week 24, and to show that a majority of Revita patients keep clinically significant weight loss after stopping tirzepatide.
“The unmet need in obesity is shifting from ‘How do we help people lose weight?’ to ‘How do we help people keep the weight off?’” Christopher Thompson, director of endoscopy at Brigham and Women’s Hospital, said in a statement. “We now need new therapeutic strategies that can offer durable weight maintenance, and I am excited for the prospect of the Remain-1 pivotal study to hopefully address this massive challenge in obesity today.”
Despite the IDE approval, Fractyl also reported bad news on Monday. In its fourth quarter and full-year 2023 earnings report, the biotech posted a $19.2 net loss for the quarter. This is an increase from a net loss of $10.9 million from the same quarter in 2022.
Fractyl said the loss was due to a $6.8 million increase in the “fair value of the notes payable and warrants” and a $1.6 million increase in operating expenses. The company also reported that the revenue and leasing of its Revita system for 2023 was “insignificant,” bringing in $0.1 million last year.
Still, CEO Harith Rajagopalan touted 2024 as a “transformational year” for the biotech as both its Rejuva and Revita platforms are approaching “key milestones as not only the Revita studies kick-off but Rejuva, its GLP-1 pancreatic gene therapy platform is “on track” to finish IND-enabling studies in the second half of the year as well.
“Following our recent initial public offering, we are now well-capitalized and positioned to execute across multiple key upcoming milestones for both our Revita and Rejuva platforms,” Rajagopalan said in a statement.
Fractyl joined the early wave of biotech IPOs at the beginning of 2024. The company completed its IPO in February which resulted in aggregate net proceeds of approximately $100 million, after deducting the underwriting discounts and other offering expenses.
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