Fractyl Health announces proposed public offering of common stock

BURLINGTON, Mass. - Fractyl Health, Inc. (NASDAQ:GUTS), a metabolic therapeutics company focused on treatments for obesity and type 2 diabetes with a current market capitalization of $91.1 million, announced Tuesday its intention to offer shares of common stock and pre-funded warrants in an underwritten public offering. According to InvestingPro analysis, the company’s stock is currently trading below its Fair Value, though the company faces challenges with cash burn and profitability.

The company plans to sell each share of common stock or pre-funded warrant with accompanying common warrants. Fractyl expects to grant underwriters a 30-day option to purchase up to an additional 15% of the offered securities at the public offering price, less underwriting discounts and commissions. The offering comes as the company reported an EBITDA of -$95.83 million in the last twelve months, highlighting the need for additional capital.

Ladenburg Thalmann & Co. Inc. is acting as the sole book-running manager for the offering, which remains subject to market conditions and regulatory approvals.

Fractyl intends to use the net proceeds to support its Revita and Rejuva pipeline programs and for working capital and general corporate purposes, according to the company’s statement.

The offering is being conducted under a shelf registration statement on Form S-3 filed with the Securities and Exchange Commission on March 3, 2025, which was declared effective on March 18, 2025.

Fractyl Health develops therapeutics targeting what it describes as root causes of metabolic diseases. The company currently maintains 32 granted U.S. patents and approximately 40 pending U.S. applications, along with numerous foreign patents and applications.

The announcement comes as the company continues development of its therapeutic approaches for obesity and type 2 diabetes, conditions that remain significant drivers of morbidity and mortality despite existing treatment options. While the company maintains a healthy current ratio of 2.5, InvestingPro data reveals several additional key metrics and insights available to subscribers, including detailed financial health scores and comprehensive analysis of the company’s growth potential.

The final terms of the offering will be disclosed in a final prospectus supplement to be filed with the SEC, according to the press release statement. With analysts maintaining a strong buy consensus and the stock showing a positive return of 13.4% over the past six months, investors can access detailed valuation metrics and expert analysis through InvestingPro’s comprehensive research reports, available for over 1,400 US stocks.

In other recent news, Fractyl Health, Inc. reported positive outcomes from its Revita procedure, showing sustained weight loss and improved glucose control in patients with obesity and type 2 diabetes over a two-year period, as per data from the Germany Real-World Registry study. The study indicated that participants experienced a median weight loss of 9.6%, with significant reductions maintained throughout the follow-up period. Additionally, Fractyl shared promising three-month data from its REVEAL-1 cohort, revealing that most participants maintained or lost weight after discontinuing GLP-1 therapy and undergoing the Revita procedure. Notably, 12 out of 13 participants either maintained or lost weight, highlighting the effectiveness of the procedure in weight maintenance.

In the realm of intellectual property, Fractyl Health has been granted two new U.S. patents, enhancing its portfolio in duodenal resurfacing technology. These patents cover systems for ablating duodenal mucosa using thermal and non-thermal electrical energy, which are integral to the company’s Revita device. On the analyst front, Canaccord Genuity reiterated its Buy rating with a $12.00 price target on Fractyl Health following the presentation of updated Phase 3 trial data. Similarly, Evercore ISI maintained its outperform rating after positive results from the REVEAL-1 open-label study. These developments underscore Fractyl’s ongoing progress in medical innovation and investor confidence.

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