Fractyl Health prices $20 million 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, announced Wednesday the pricing of its underwritten public offering of 19,047,619 shares of common stock with accompanying warrants. The company, currently valued at $91.59 million, has shown strong momentum with a 2.75% return over the past week, though InvestingPro data indicates significant cash burn with negative EBITDA of $95.83 million.

The offering, priced at $1.05 per share, is expected to generate $20 million in gross proceeds before deducting underwriting discounts and expenses. Each share comes with one Tranche A warrant with a 2-year term and one Tranche B warrant with a 5-year term, both with an exercise price of $1.05 per share. According to InvestingPro analysis, analyst price targets range from $6 to $12, suggesting potential upside from current trading levels.

Fractyl has granted underwriters a 30-day option to purchase up to an additional 2,857,142 shares with associated warrants. If all warrants are fully exercised for cash, the company could receive up to an additional $40 million in future gross proceeds.

The company plans to use the net proceeds to support its Revita and Rejuva pipeline programs and for working capital and general corporate purposes.

Ladenburg Thalmann & Co. Inc. is serving as book-running manager for the offering, which is expected to close on or about August 7, 2025, subject to customary closing conditions.

The Tranche A warrants are callable at Fractyl’s option following the release of 3-month randomized midpoint clinical data from the ongoing REMAIN-1 study, subject to certain conditions including the stock’s average trading price exceeding $1.37 per share for 15 consecutive trading days.

Fractyl Health develops therapeutics targeting root causes of metabolic diseases rather than just managing symptoms. The company holds 32 granted U.S. patents and approximately 40 pending U.S. applications. While the company maintains a healthy current ratio of 2.5, indicating strong short-term liquidity, InvestingPro analysis reveals additional insights about the company’s financial health and growth prospects in its comprehensive Pro Research Report, available to subscribers along with real-time financial metrics and expert analysis.

This article is based on a press release statement from Fractyl Health.

In other recent news, Fractyl Health, Inc. announced a proposed public offering of common stock and pre-funded warrants, aiming to raise capital through an underwritten public offering. The company plans to offer shares with accompanying common warrants and has granted underwriters a 30-day option to purchase an additional 15% of the offered securities. Fractyl Health also reported that its Revita procedure led to sustained weight loss and improved glucose control over two years in patients with obesity and type 2 diabetes, based on data from its Germany Real-World Registry study. Furthermore, the company shared positive three-month results from its REVEAL-1 open-label study, showing that most participants maintained or lost weight after discontinuing GLP-1 therapy and receiving the Revita procedure.

Canaccord Genuity reiterated its Buy rating on Fractyl Health stock, maintaining a $12.00 price target following the presentation of updated data from the Phase 3 trial of Revita. Similarly, Evercore ISI reiterated its outperform rating after positive results from the REVEAL-1 study. These developments highlight Fractyl Health’s ongoing efforts and achievements in weight maintenance and diabetes treatment.

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