Good afternoon, and welcome to Fractyl Health’s Fourth Quarter and Full Year 2024 Financial Results and Business Updates Call. As a reminder, this conference call is being recorded. At this time all participants are in a listen-only mode. There will be a question-and-answer session following management’s prepared remarks. I will now turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyl. Brian, you may now begin.

Thank you. This afternoon, we issued a press release that outlines the topics we plan to discuss today. The release is available at www.fractal.com under the Investors tab. Joining us on the call today are Dr. Harith Rajagopalan, Chief Executive Officer; and Lisa Davidson, Chief Financial Officer. During this call we make forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, including the Annual Report on Form 10-K filed today, which I encourage you to review. Any forward-looking statements on the call are subject to substantial risks and uncertainties and speak only as of the call’s original date, and we undertake no obligation to update or revise any of the statements, even if subsequent events cause the company’s views to change. It is now my pleasure to pass the call over to Harith.

Thank you, Brian, and good afternoon everyone. Thank you for joining us today. GLP-1 drugs have undoubtedly transformed people’s ability to achieve short-term weight loss. However, real world data reveal the significant unmet need in obesity that remains. Nearly 65% of patients discontinued these treatments within the first year, with many experiencing rapid weight regain thereafter. According to a recent study in JAMA, only a minority of individuals who stop taking GLP-1 drugs reinitiate therapy within one year. So while these drugs deliver initial success, long-term weight maintenance remains elusive for too many people caught in an unending pattern of loss and regain. Even as more drug options become available, it’s becoming clear that non-drug options will play a crucial role in long-term weight maintenance. This is the single largest gap in obesity care today. Fractyl is pioneering the first potentially durable solution to address the weight maintenance crisis, not just managing symptoms, but tackling the root cause of obesity in the duodenum with Revita and developing a potentially one-and-done Smart GLP-1 gene therapy with Rejuva. The unmet need is clear, and we are driving as rapidly as possible to deliver important data sets to demonstrate the potential of our solutions to address this need. Today I’ll take you through the defining milestones of 2024 and why we believe 2025 marks a pivotal step forward for Fractyl as we are laser focused on our efforts to deliver long-term metabolic health solutions to patients who need them. We made tremendous strides across clinical, regulatory, and financial milestones in 2024. We completed our IPO debuting on the NASDAQ under the ticker symbol GUTS, strengthening our financial position. Secured FDA IDE approval for a pivotal study of Revita’s role in weight maintenance following GLP-1 drug discontinuation, setting the stage for a major value inflection point as we generate the industry’s first-ever randomized data in weight maintenance, a completely untapped market. Earned FDA Breakthrough Device designation for Revita in weight maintenance after discontinuation of GLP-1 based therapy. Initiated the REMAIN-1 pivotal study with an overwhelmingly positive response from both patients and physicians, reinforcing the urgent demand for an off-ramp to GLP-1 drugs. Advanced our Rejuva gene therapy platform, nominating RJVA-001 as the first smart GLP-1 Type 2 diabetes candidate and RJVA-002 as a smart GIP/GLP-1 candidate for obesity. Received industry recognition with Rejuva’s preclinical data being named a top abstract at ADA’s 84th Scientific Sessions for a head-to-head study that showed Rejuva prevented weight and glycemic rebound after semaglutide withdrawal and completed key in vivo studies to support a clinical trial application for RJVA-001, laying the foundation for the next steps in this important program. Turning to 2025, we expect this to be a breakout year for Fractyl, with our first pivotal data readout, our first regulatory filings for our gene therapy platform, and our clear path to market leadership in obesity and metabolic health. We have two distinct but highly de-risked event paths, one for Revita in weight maintenance and the other for RJVA-001’s path to first-in-human data and Type 2 diabetes. We expect to achieve key clinical milestones from the REMAIN-1 study in 2025, starting with open label data from the REVEAL-1 cohort expected at the end of Q1, a midpoint analysis anticipated at the end of Q2, and full study enrollment expected in the summer, with each milestone driving us closer to breakthrough advancements in weight maintenance. We also plan to submit the first CTA module for RJVA-001 in Type 2 diabetes to regulators in the first half of 2025. If our CTA is authorized, we expect to report preliminary data in 2026. Now let’s dive deeper into the progress we’ve made and what’s on the horizon. In January, we made the strategic decision to focus our Revita program exclusively on weight maintenance post GLP-1 withdrawal, prioritizing the REMAIN-1 pivotal study. This decision was driven by promising early insights from REVEAL-1 and overwhelming demand from both patients and physicians to participate in the REMAIN-1 pivotal study. In just six months, over 189 patients have enrolled across 13 clinical sites, reinforcing the urgent need for an effective off-ramp from GLP-1 therapy. In January, we also shared initial results from the first patient treated in the REVEAL-1 open label cohort. This patient lost more than 15% of their total body weight on a GLP-1 drug and after discontinuing per study protocol, underwent the Revita procedure one month post-procedure. The patient successfully maintained their weight loss during the holiday season, a notoriously challenging time for weight management. For context, prior studies of tirzepatide withdrawal show an average 3% weight regain within four weeks of GLP-1 discontinuation. These early findings suggest Revita may provide a path forward for patients transitioning off GLP-1s, and we look forward to sharing additional patient data later this month. The financial pressures on current GLP-1 treatments are becoming impossible to ignore. With over 70% of U.S. adults affected by obesity, driving an estimated $170 billion in annual medical costs, payors are reassessing their coverage. For example, West Virginia’s Public Employees Insurance Agency recently discontinued GLP-1 coverage, citing unsustainable monthly costs, and insurers in states like North Carolina and Colorado are following suit, amplifying the need for sustainable, long-term solutions. There is an interesting emergent dynamic in that obesity has become a health equity concern for public payors and yet they are struggling to justify ongoing coverage of drugs that clearly work, but where their own real world evidence shows that adherence is a significant issue. Dr. Shailendra Singh, Director of Bariatric Endoscopy at West Virginia University Medicine and a PI in our REVEAL-1 study has observed that patients who have achieved weight loss with GLP-1s are now beginning to ask, 'what’s next?' He shared with me, 'I’m excited to provide solutions for patients who otherwise have none.' There is incredible interest in joining the study and in the prospect of long-term durable weight maintenance solutions. Shifting focus to the REMAIN-1 randomized pivotal study, this groundbreaking double-blind trial is designed to evaluate the efficacy of our Revita procedure in sustaining weight loss after discontinuation of GLP-1 drugs. As the first study of its kind, REMAIN-1 places Fractyl at the cutting edge of innovation in long-term weight maintenance solutions. Let’s frame what is a reasonable expectation for a clinically meaningful weight maintenance solution. The FDA has specified that weight maintenance is defined as the achievement and maintenance of clinically meaningful weight loss for one year after the discontinuation of ongoing therapy. In their SURMOUNT-4 study of tirzepatide withdrawal, Eli Lilly reported that only about 16% of study participants maintained at least 80% of the weight they had lost while on the drug one year afterward. We believe that a weight maintenance therapy should at a minimum retain at least 50% of their weight loss at one year. A home run would be for a majority of patients to retain at least 80% of the weight they had lost at one year. Given the magnitude of the unmet need, we believe this range of outcomes would be a tremendous victory for patients who need to maintain their hard-won weight loss. Despite the development of a variety of products for obesity ranging from peptides to small molecules to siRNA approaches, we are unaware of any other products in development that have the potential to sustain metabolic benefits for more than one year after drug discontinuation like the ones we are developing at Fractyl. The German Real World Registry study in patients with Type 2 diabetes has given us valuable data that validates our confidence in Revita as a potential solution. We have seen impressive clinical results in the first tranche of 17 patients who have achieved one year of follow-up, despite the fact that these individuals represent a hard-to-treat patient segment. At 12 months post-Revita procedure, mean weight was reduced by more than 7 kg within one month and then sustained for one year thereafter. At 12 months post-procedure, 94% of participants reported they would undergo Revita again and 100% would recommend the procedure to a family member or friend. To date, no device or procedure-related serious adverse events have been reported. Think about what this means in a hard-to-treat patient population. They undergo a procedure, and one year later they are living their lives at a lower weight sustainably. We believe this is a very powerful clinical profile for weight maintenance therapy in a real-world setting. Looking beyond data and with an eye towards commercialization, we plan to leverage our relationships with GI endoscopists who specialize in bariatric and metabolic endoscopy to build a scalable and efficient commercial model. These physicians have a built-in patient base actively seeking sustainable weight management solutions and a strong referral network from primary care providers. The integration of Revita into these existing workflows, where millions of endoscopic procedures are already performed annually for patients with obesity, creates a clear high-volume opportunity for broad adoption. Unlike traditional drug-based approaches, Revita represents a durable procedure-based intervention designed to fit seamlessly into the standard of care for patients transitioning off GLP-1 therapy. We look forward to continuing to build out this targeted commercial model and discussing our path forward in future quarters. Now let’s talk about Rejuva, our next-generation approach to metabolic disease. Unlike traditional GLP-1s that bombard your system with high drug levels, our smart GLP-1 candidates are designed for physiologically regulated expression. More GLP-1 when you need it, where you need it, and how much you need. We believe this is the next generation of incretin therapy. Moreover, the anticipated low viral doses can enable a low cost of goods and a new pricing model for gene therapies. Because the patient population at risk is so large, this is a new commercial model for gene therapies and one that we believe can overcome the challenges of commercializing gene therapies to date. At the end of last year at the World Congress for Insulin Resistance, we presented key preclinical data demonstrating the successful targeted delivery of Rejuva-001, our smart GLP-1 pancreatic gene therapy, in large animal models. Using our proprietary endoscopic ultrasound-guided system, we achieved safe and precise pancreatic delivery in Yucatan pigs at a low total viral dose, closely mirroring our planned first-in-human studies. Results showed therapeutically relevant GLP-1 expression within pancreatic beta cells with no adverse safety effects, reinforcing Rejuva-001’s potential as a breakthrough approach for type 2 diabetes. We recently met again with German regulators and achieved alignment on a patient population and study design for the Rejuva-001 first-in-human study. Our primary focus will be to evaluate its safety and tolerability, and the study is also designed to provide an early indication of potential efficacy to help determine the optimal dose for a future Phase 3 study. We plan to investigate 001 in a patient population with uncontrolled type 2 diabetes who are on a GLP-1 drug and between one to three other non-insulin glucose-lowering agents. We’re very encouraged by the positive dialogue with German regulators and the favorable feedback we have received thus far on our preclinical program and data and our upcoming CTA filing. With this critical validation and alignment in place, we are on track to submit this first CTA module to regulators in the first half of 2025. If our CTA is authorized, we expect to report preliminary data in 2026. We hope to show how a smart GLP-1 can reshape the treatment paradigm in metabolic disease and bend the curve toward remission of obesity and type 2 diabetes. With that, I will now turn the call to Lisa to provide an update on our fourth quarter and full year financials. Lisa?

Thank you, Harith. In the fourth quarter of 2024, revenue was generated from our commercial pilot in Germany and enabled patients to enroll in the German Real-World Registry study. Turning to operating expenses. Research and development expense in the fourth quarter of 2024 was $20.3 million, compared to $10.1 million for the same period in 2023. The increase during the quarter was primarily due to the progress made in our REMAIN-1 clinical study, the REVITALIZE-1 clinical study, continued development of the Rejuva platform, and increased personnel-related expenses including stock-based compensation. Selling, general and administrative expense in the fourth quarter of 2024 was $4.9 million compared to $2.8 million in the same period in 2023. The increase during the quarter was primarily due to the increased costs associated with operating as a publicly traded company and increased personnel-related expenses including stock-based compensation. For the fourth quarter of 2024, we reported a net loss of $25 million compared to a net loss of $19.2 million for the same period in 2023. The increase in net loss was primarily attributed to the increase in operating expenses discussed above, partially offset by the non-cash gain from changes in the fair value of warrant liabilities, as well as an increase in net interest income. As of December 31, 2024, Fractyl had approximately $67.5 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 key anticipated company clinical milestones into 2026. I will now turn the call back to Harith.

Thank you, Lisa. We are not just participating in the obesity revolution; we are defining it. These are the earliest days in this market with products that show tremendous promise and yet large unmet needs that remain. This is our moment to lead, and we are moving with urgency. 2025 will be the year that we show the world that weight maintenance is possible. The work we are doing today has the power to change millions of lives, offering real, lasting solutions beyond temporary fixes. The demand is clear, the science is strong, and our path forward is bold. It takes GUTS. I want to take a moment to express my deep gratitude to the patients and physicians who place their trust in us. To the dedicated employees at Fractyl who are relentless in their pursuit of life-changing therapies. And to you, our shareholders, whose support fuels our mission. Your belief in our work drives us forward, and we have never been more confident in our ability to deliver on our promises. And with that, we will now open the call up for questions. Thank you.

Thank you. Our first question comes from Jason Gerberry of BofA Securities. Your line is open, Jason.

Hey, guys. This is Chi on for Jason. Thanks for taking our questions. I guess, the first one I want to touch on REMAIN-1. So you are expecting a 12-week midpoint analysis late in the second quarter. We are right at the start of the second quarter now. So presumably you have a line of sight on how many patients who have achieved the prespecified 15% total body weight loss and those who have subsequently been randomized two-to-one to receive Revita or sham. So I’m hoping you can elaborate if you have randomized roughly 40 patients or so that are expected for the midpoint analysis. And curious, what are the dropout rates so far that is patients getting free tirzepatide, but don’t follow through with the randomized portion of the study.

Hi, Chi, thank you for the call and the question. I think that as of this morning there were nearly 100 patients who’ve achieved either 15% body weight loss or close to it. A substantial number of the proportion of the 45 have been randomized and/or procedures are being scheduled. What I can tell you is that there’s not a single patient who has dropped out of the study because they have not wanted to undergo the procedure so far. So every patient who has hit 15% body weight loss and who’s had a procedure that has been scheduled has undergone that procedure. We’re gratified by that fact because as you know, there’s a question about whether patients might just enroll in the study in order to get tirzepatide and then not be interested in the procedure itself. That has not been an issue that we have observed thus far. With respect to the exact timing of the midpoint analysis, we will be giving updates along with REVEAL-1 data at the end of this month, but we remain on track based on what we’re seeing right now.

Great. That’s a good segue to my second question. And thanks for the color on REMAIN-1. So on REVEAL-1 data expected later this month. What sort of format and venue do you have in mind for the data disclosure? Can you remind us of your expectation of the REVEAL-1 data? I know you’ve referenced tirzepatide 3% weight gain up to four weeks. So remind us what your expectation of the REVEAL-1 first data set and do you expect a lot of data variability from the 10 patients or so worth of data?

We’re having some background from the operator, but I’ll go ahead and answer your question. I’ll repeat your question, Chi, and then we will go. So what you’re asking is, what is the expectation for how we’re going to present the data and then also the variability there? I can tell you that this is a more heterogeneous patient population than REMAIN-1. As you may remember – as for the audience, as you may remember, in REMAIN-1 we’re taking individuals who are obese, who are GLP-1 drug naive. We’re providing tirzepatide, titrating them to 15% body weight loss, and then randomizing them. In the process of stopping their tirzepatide, and what that allows is a more or less homogeneous group of individuals who’ve lost a little bit over 15% total body weight loss. In REVEAL, we are enrolling subjects who have already been on either semaglutide or tirzepatide. The majority of them have been on tirzepatide, but they have lost varying amounts of weight relative to what you would expect to see from the REMAIN study. What we’ve shared already is that a single individual who lost between 17% and 18% total body weight who was followed through her one-month visit in January and roughly six weeks after tirzepatide discontinuation, and a little bit more than a month after the Revita procedure. She had not regained any body weight and had not been feeling any ill health. So what we hope to be able to show with the press release at the end of the month is a clear picture of this group of open-label patients in REVEAL-1 and to be able to give enough information to be able to unpack how you might translate that into what you would expect to see from REMAIN.

Got it. And just last quick one from me on Rejuva. Can you talk about what are the gating items you need to complete before the CTA submission in the first half of 2025? I know you talked about this before, but I’m hoping you can fine-tune where you are at with the process. And are you still planning to initiate a first-in-human study in the first half?

Right. So we provided additional clarity on that in our guidance today. We are going to be filing our first CTA module in the first half of the year. There’s a device module and a drug module. The device module is going to have certain preclinical verification testing that needs to be completed in addition to the in vivo testing and CTA-enabling studies that have been done, like aging and biocompatibility. So those are the sorts of things that remain on the device side of the house. And on the drug side of the house we have some remaining CMC assay tests and final testing to be completed before the drug is complete, and we are going to initiate that submission in the first half of the year as we had previously discussed.

Okay, great. Thanks so much.

Thanks.

Thank you. Our next question comes from Mike Ulz of Morgan Stanley. Please go ahead, Mike.

Great. Good afternoon and thanks for taking my questions. Maybe just a follow up on Revita and the REVEAL-1 open-label portion of the study. You mentioned planning to give an update sort of end of this month. Just curious about the number of patients you plan to share. I think in the past you were suggesting maybe around 10 patients. Is that still the case?

Yes, that’s still the case. We’ve actually just been constraining the size of that study as we’ve been also focusing on enrolling remain, and so we are continuing to – we’ve enrolled north of 10 patients so far and we are planning on sharing about 10 patients worth of data by the end of the month.

Okay, great. And then maybe just a Rejuva question more on 002 if you could just remind us or give us an update there on the status of that program and next steps there? Thanks.

So Rejuva-002 is a smart GIP GLP-1 dual incretin. It’s the same delivery catheter that we developed for 001 and it is the same AAV9 backbone. The difference is that it’s a plasmid that will express both GIP and GLP-1 that’s still in pre-clinical testing and we have not provided guidance at this time on when that will go to the clinic. We do believe that Rejuva-001 in preclinical studies has demonstrated efficacy on both blood sugar and on body weight. We are planning to enroll patients who have obesity and type 2 diabetes in the first-in-human study. We believe that we’re going to learn a great deal about dosing from Rejuva-001 that will inform how we plan to dose 002 in patients as well. As we make more progress on 001 in the clinic or path to the clinic and then into the clinic, we’ll give you guidance on 002’s timeline to a first-in-human as well.

Great. Thanks again for taking my questions.

Thanks.

Thank you. Our next question comes from Michael DiFiore of Evercore ISI. Please go ahead, Michael.

Hi guys. Thanks so much for taking my questions and congrats on all the progress. Just two quick ones for me regarding that first patient in REVEAL that maintained her body weight. Is there any updates on that patient in terms of how far, how much further along she is and whether she still has maintained or not gained any weight back? And have you done any further workup or even biomarker analysis on that patient to maybe shed some more light on durability or even mechanism for that matter? Thank you.

Thanks, Mike. I don’t have any additional information to share at this time. We will have more information in due course. One of the nice things about the REVEAL-1 open-label study is that we plan to continue to follow these patients beyond early follow-up, as you know. We’re going to share one-month data in a cohort, but we certainly will be following that up with 3-month and 6-month data when we have it. But I have no specific additional information to share at this time.

Got it. And just one quick follow-up, more of a commercial type of question. Are there any plans assuming the REVEAL-1 and the REMAIN midpoint analysis are stellar? Are there any plans to seek potential strategic partnerships or collaborations to maybe bolster commercialization efforts and share development costs?

Great question. Mike, we’re talking to a lot of the major players in the space. I believe that this is a study and an endpoint and an unmet need that is very much on a lot of people’s minds. There are a lot of people who would be interested in this therapy and the opportunity.

Got it. Thanks so much.

Yes.

Thank you. Our next question comes from the line of William Wood of B. Riley Securities. Please go ahead, William.

Thank you so much and congratulations on a very nice year and quarter. A couple from us, maybe just one brief one or actually I guess sort of a combined two on the REVEAL-1. I’m just kind of curious as we move throughout the year, you said you’d be providing additional data points in weight loss or weight maintenance, I guess. But when upon those readouts, would we expect sort of increasing data including biomarkers, possibly body composition or other events or other additional data analysis? And then additionally, do you think – and I understand at least in REMAIN, it’s all tirzepatide based population, but do you or would you potentially expect differences in weight regain based on whether the patient originally took semaglutide or tirzepatide just with differences in body composition after those two drugs or any other differences in those weight loss dynamics? And I have a follow-up. Thank you.

Thanks, William. Appreciate it. So we are collecting blood and doing lab work on assessments on blood sugar parameters, cardiovascular parameters, and also measuring leptin as a biomarker for body fat mass content. We will be compiling those data and then sharing them over the later on in the year for REVEAL. While we expect top line data for REMAIN at the end of Q2, we do plan to continue to investigate blood sugar and other assessments as well for reporting later on, although I can’t guarantee that all of that will be available right up front. With respect to the weight regain, our analysis, and we’ve looked at this extensively, is that the weight regain from semaglutide and tirzepatide does not depend so much on the drug that they’re on, but rather on the time course since the discontinuation of the medicine. That’s part of what we think is important to share as we walk through the REVEAL data set so that people can understand how to think about what Revita may be doing from the Open-Label cohort as a prelude to the randomized data coming thereafter.

Excellent. Appreciate that extra color. And then in terms of you mentioned that there have been a couple of states or I guess maybe even numerous states that have either rejected insuring or covering obesity treatments. And then there have been others that have sort of put it on the table and either accepted it or then, sort of turned back the clocks on it. Have you gone to any of the states or bodies that have potentially had these sort of back-and-forth thoughts on obesity treatments and sort of seen what their idea is on the DMR sort of treatment? If this is something that they look at and they’re like, 'Oh, this is, we’re actually very interested in this.' So sort of apart from say an FDA or a broad insurance program, just curious about those thoughts.

Yes, we’ve had some conversations with public payors, and I think we have a good understanding of what they view their pain points to be. I think that the proof will be in the data that we generate from REMAIN and in the pivotal study in order to be able to articulate a value proposition more crisply. What I can say is that the desire to be able to address obesity in a holistic way and in a cost-effective manner is now very clear. I do not believe that that was perceived to be a need by payers five years ago, but I do believe that there is a groundswell that is occurring currently, and I believe that the public payors see that as much as the employers do. Our aim with the REMAIN study, which is incredibly well designed to do that, is to demonstrate a holistic strategy for durable weight maintenance, which we believe will be highly attractive. But we’ll have more to say about that with data in hand as we pursue the program over the coming quarters.

Got it. Understand. Yep. I’ll stop there and hop back in the queue. Appreciate you taking our questions and congratulations again.

Thank you.

Thank you. I would now like to turn the conference back to Dr. Rajagopalan for closing remarks. Sir?

Thank you very much. Thanks to everyone for joining us this afternoon. As always, we appreciate your continued interest in and support of Fractyl, and we look forward to continuing to share updates on our progress as we address weight maintenance in the coming months. I look forward to speaking with you again shortly.

This concludes today’s conference call. Thank you for participating. You may now disconnect.