Fractyl Health stock steady as Evercore ISI reiterates outperform rating

Investing.com - Evercore ISI has reiterated its outperform rating on Fractyl Health Inc (NASDAQ:GUTS) following positive three-month results from the company’s REVEAL-1 open label study. The company, currently valued at $105 million, has seen its stock surge over 12% in the past six months, though it remains 52% below its 52-week high of $5.34. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $6 to $12.

The REVEAL-1 study assessed patients’ ability to maintain weight loss after undergoing Fractyl’s Revita duodenal mucosal resurfacing (DMR) procedure. Patients in the study had previously lost more than 15% of their body weight while taking tirzepatide or semaglutide for an average of 1.3 years before the procedure.

According to Evercore ISI, the results showed that three months after the procedure, 13 patients had only regained a median of 0.46% (approximately one pound) of their post-GLP1 body weight. This compares favorably to an expected 5-6% weight regain based on the SURMOUNT-4 trial.

Evercore ISI indicated that these results are promising for Fractyl’s pivotal randomized, sham-controlled REMAIN-1 trial, which has an interim analysis scheduled for the third quarter of 2024.

The REMAIN-1 trial will report data from 45 patients who are three months post-procedure, potentially providing further evidence of the Revita procedure’s effectiveness in maintaining weight loss after GLP-1 therapy.

In other recent news, Fractyl Health has reported its Q1 2025 earnings, revealing a significant rise in research and development expenses to $19.4 million, up from $14.4 million in the same quarter the previous year. The company also reported a widened net loss of $23.7 million compared to a $3.3 million loss in Q1 2024. Fractyl Health’s cash reserves remain strong at $42.1 million, providing a financial runway into the fourth quarter of 2025. Additionally, Fractyl Health has been granted two new U.S. patents for its duodenal resurfacing technology, enhancing its intellectual property portfolio. The company has also announced positive three-month data from its REVEAL-1 cohort study, indicating weight maintenance or loss in most participants after discontinuing GLP-1 therapy. Fractyl Health is advancing its gene therapy candidate, RJVA-001, for type 2 diabetes and obesity, with plans to initiate first-in-human dosing in 2026, pending regulatory approval. The company has completed full enrollment in its REMAIN-1 pivotal study, which evaluates the Revita device for weight maintenance post-GLP-1 therapy discontinuation. Lastly, Fractyl Health’s leadership has expressed optimism about the company’s innovative platforms and future growth prospects.

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