Hello, everyone, and thank you for joining the H.C. Wainwright 28th Annual Global Investment Conference. My name is Lander, Vice President of Equity Research at the firm. Please join us for one-on-one meetings, corporate presentations, and panels that will be available live and on demand during the week of September 14th to the 16th. We are pleased to have you with us today, and it is now my pleasure to introduce our next presenter. Please join me in welcoming Harith Rajagopalan, CEO of Fractyl Health, a clinical-stage metabolic therapeutics company developing pioneering approaches to treat obesity and type 2 diabetes. Harith, all yours.
Lander, thank you so much, and thank you to H.C. Wainwright for the introduction. Fractyl Health is focused on a very simple problem. How do we achieve durable weight and metabolic maintenance for patients who are discontinuing GLP-1 medicines? We believe that this concept of weight maintenance is the single biggest problem that is yet to be solved in obesity, because we live in a world, in an era, where GLP-1s have unlocked incredible weight loss, but the durability of that weight loss remains unsolved. There are 30 million patients on GLP-1s in the U.S. It is estimated that 65% discontinue before one year, and they regain 85% of the weight that they had lost.
This is according to the data that are generated from Eli Lilly's own studies in tirzepatide discontinuation, showing about 60% regain within 12 months, and then almost all of the weight is regained by one and a half years. This problem affects nearly a million people a month in the U.S., and we believe that the next phase of obesity care will be defined by how to achieve durable weight maintenance, not how to achieve weight loss. Weight loss is solved. Weight maintenance is now the new unmet need. We are targeting gut dysfunction, which is a root cause of obesity, with a device-based approach called mucosal ablation, which we believe to be a compelling modality for durable metabolic control. The idea is simple.
Chronic exposure to high-fat, high-sugar diets, and ultra-processed foods are causing damage to the duodenum, the first part of the small intestine, and critically, the hunger center of the gut. These changes are driving alterations to gut-brain nutrient sensing signaling mechanisms, causing duodenal dysfunction. This duodenal dysfunction, we believe, can be repaired and reversed by a targeted endoluminal ablation of the duodenal mucosa that damages that removes the diseased dysfunctional duodenum and allows the regeneration of a healthy new lining to restore normal nutrient sensing and signaling mechanisms once again. Revita is our proprietary approach to targeting the duodenal mucosa, enabling a one-time outpatient procedure ablating this segment of the intestine for durable weight maintenance. It is a single outpatient endoscopic procedure that is designed to complement other approaches, including pharmacology.
It has FDA Breakthrough Device Designation in post GLP-1 weight maintenance, and we have a robust intellectual property portfolio protecting our intellectual and clinical leadership in the space. We have three clinical studies that are ongoing in post GLP-1 weight maintenance, and this is a stepwise validation program through to a potential De Novo classification request marketing application in the U.S. later this year. We ran an open-label exposure study called the REVEAL-1 cohort and presented one-year data from patients in the real world who needed to stop or wanted to stop taking a GLP-1 and were followed after Revita for one year. We just, in July, presented randomized, double-blinded, sham-controlled data from our REMAIN-1 midpoint cohort, again demonstrating the potential for Revita to enable durable weight maintenance after the discontinuation of a GLP-1, this time in a sham-controlled setting.
Both of these help to de-risk our ongoing pivotal study, which has already completed its enrollment and randomizations and is expecting its top-line six-month data in early Q4 2026, with a potential De Novo classification request marketing application submission in late Q4 2026. In the REVEAL study, patients who were living with obesity, without type 2 diabetes, who were already on a GLP-1, stopped their GLP-1 and then underwent the Revita treatment and were followed for one year afterwards. The results are shown on this slide. We saw incredible demonstration of durable weight maintenance at one year, with patients in REVEAL regaining approximately one-third of the expected weight regain one year post GLP-1. That is roughly 80% of their pre-Revita weight loss retained at 52 weeks. Impressively, 33% of the participants who were followed through one year continued to lose weight past GLP-1 discontinuation, even at one year.
The REMAIN-1 midpoint cohort is a demonstration in a proof of concept study, prospective, randomized, double-blinded. Patients with obesity were given tirzepatide to achieve at least 15% percent total body weight loss. Tirzepatide was then discontinued. Patients were randomized two to one to Revita versus sham, and we recently reported the one-year data from this sham-controlled study. Here we observe that Revita reduced weight regain in the intention-to-treat population, and we also observe that longer lengths of duodenal ablation yield greater efficacy compared to the sham. At 12 months, Revita reduced weight regained by over 60% in patients with complete ablations, defined as more than 14 centimeters of duodenal mucosa, whereas the sham arm regained approximately 13% percent total body weight at 12 months, which is consistent with what has been reported in the literature with tirzepatide discontinuation from Eli Lilly and others.
When we focus on those individuals who received complete ablations of more than 14 cm, we find that patients retained over 80% of their weight loss versus less than 50% retained in the sham arm. What we believe that the phase II equivalent study enabled us to do is to be able to demonstrate that in patients with the right length of duodenal ablation and greater degrees of GLP-1 induced weight loss, we are able to see the greatest effects on weight loss maintenance. Importantly, the pivotal study is very well designed, and in fact, optimized for the patients who lost more weight during the GLP-1 run-in phase and who got more complete ablations, implying that the pivotal is enriched for the two key signals that are necessary to define a large, clinically meaningful, and growing effect size over time.
This efficacy was observed in the face of an outstanding safety and tolerability profile. There were no device-related treatment-emergent adverse events after day two. There were no device-related serious adverse events in the study that were definitely or probably Revita related. In fact, there were no excess adverse events with Revita compared to a sham. All of the adverse events that were observed were mild, periprocedural, and lasting less than two days. One interesting observation is that there was one new diagnosis of type 2 diabetes in the sham arm and no diagnoses of type 2 diabetes in the Revita arm, implying the potential risk for the development of metabolic disease in individuals who discontinue GLP-1s that Revita aims to hopefully prevent.
If I zoom in on our adverse events, there were two individuals who experienced a total of four treatment-emergent adverse events, two out of 29 individuals. They had abdominal discomfort, sore throat, nausea, dry mouth, one episode of each, and they either lasted just the day of the procedure or for two days, with no further treatment-emergent adverse events in these individuals or any of the 27 other Revita-treated participants for the full one year of follow-up. This mild periprocedural profile, we believe, supports broad outpatient use in endoscopy. Turning now to the REMAIN-1 pivotal study in weight maintenance. This is the exact study design, patient population, treating physicians, and enrollment criteria as the pilot study that I just showed to you.
Adults with obesity, GLP-1 naive, without type 2 diabetes, who were given tirzepatide to achieve at least 15% total body weight loss and then discontinued the tirzepatide and were randomized one week later to Revita versus sham in over 300 participants. We have completed randomizations as of February. The last patient will be back for their six-month co-primary endpoint this month, and we anticipate presenting top line six-month pivotal data in early Q4 and combining the clinical evidence with our design module and our manufacturing module for a potential De Novo marketing application submission at the end of this year. Given the similarity between the proof of concept pilot study and the pivotal study, we can look at the efficacy signal in the pilot and then help reevaluate the powering for our pivotal.
If you think about the first co-primary endpoint for this study, it's the percent total body weight regain in Revita versus sham at six months. The first table shows an illustrative regain in the ITT population at six months. 10% is what prior clinical evidence would suggest would be expected in the sham arm. We observed an 11.6% regain in the sham arm at six months in our midpoint cohort. We have also observed only a 5.1% regain in the Revita arm. So more than 50% protection from regain in the ITT population. All that we need in order to be able to have a P value of less than 0.05 is about a 2.6% treatment delta between Revita and sham. This first co-primary endpoint is over 95% powered for success based on the results from the pilot study.
The second co-primary endpoint is the responder rate or the percentage of Revita patients who maintain at least 5% total body weight loss at 12 months. In the ITT population, we observed 73% compared to the 50% FDA mandated pre-specified performance goal and 91% in the complete ablation cohort. Turning from clinical evidence generation to the regulatory path, we believe we are advancing toward a more efficient U.S. regulatory path with FDA pre-submission feedback received that is favorable on Revita's safety profile, indicating that Revita may be more consistent with a Class II or low to moderate risk device rather than a Class III high risk device. We intend to submit our De Novo marketing application with all of our safety data in late Q4 of 2026.
The reason we believe that this is valuable is because a De Novo pathway is more efficient, tends to be faster, and tends to be more capital efficient than a PMA pathway. Let's talk about the commercial opportunity. We all know how large the obesity problem is, but within obesity, with amazing drugs that exist and are on the horizon, the problem is now shifted from how do you get weight loss to how do you keep it off? There are 1 million patients who are stopping GLP-1s each month, most regain their weight, and Revita is the potential durable off-ramp, building at leading centers where there are already metabolic endoscopists who can perform this procedure and patients on GLP-1s and can compound over time into a very large and durable business. To capture this opportunity, we focus on three key levers.
The centers of excellence launch initially, that then allows us to expand into the community, the number of procedures that we will perform at each of these centers, and then covered lives. With respect to covered lives, we see an amazing opportunity for a reimbursement mechanism right at the time of launch through the transitional pass-through payment via CMS, which will allow us to generate evidence in a real world registry and then build broader reimbursement as the post GLP-1 patient population treated with Revita expands. We anticipate a capital-light, high margin, recurring revenue commercial model at centers of excellence. There are roughly 2,000 endoscopy suites that are already equipped for this procedure, but there are 1,000 centers of excellence that already have all of the pieces in place in order to be able to successfully introduce Revita.
These pieces include patients who are on a GLP-1 who are looking for an off-ramp, diet and lifestyle counseling, prior authorization mechanism for market access, Revita endoscopy suite time and endoscopic skill set, and all of the requisite follow-up to be able to assemble data into a real-world registry. Some of the enabling features associated with Revita is a very fast learning curve. It takes less than four cases, typically, for endoscopists to learn how to do the procedure. High gross margins anticipated at greater than 80% on the single-use catheter component, and large endoscopy capacity at each major center of excellence to be able to perform this procedure at scale. All of this allows a deep commercial footprint with a very light commercial sales model. Our reimbursement execution is already underway.
We see hospitals having a clear path to permanent reimbursement with initial payment via Medicare coverage of GLP-1s that is expanding right as Revita would launch. When you think about device reimbursement, you think about coverage, coding, and payment. On the coverage side, we believe that pivotal data and a real-world registry will support initial Medicare coverage and then broader commercial coverage. On the coding front, we have already applied for a dedicated CPT code. There will be an AMA meeting in September where we believe that that code will be reviewed with the potential to go into effect early in 2027.
We see a clear pathway for Breakthrough Devices from the FDA to get transitional pass-through payment through Medicare so that hospitals that implement Revita at launch can be made whole on the cost of the disposable as they get a positive contribution margin from the facility fee. There is one tremendous tailwind at launch, which is the Medicare GLP-1 Bridge Program, which began covering GLP-1s for obesity in July of 2026. The CMS is projecting that there will be a single-digit million number of patients on a GLP-1 in Medicare by this time next year, which expands the potential discontinuation pool just as Revita approaches a potential launch in the United States. The health economic rationale is very straightforward.
We see the opportunity for a one-time procedure to replace the indefinite drug spend associated with high-cost GLP-1s, and these favorable economics may potentially support broad commercial coverage with payers who are otherwise covering GLP-1s today without a reasonable off-ramp for patients who need to stop or want to stop taking these medicines. Now let us think about the milestones ahead. We anticipate top-line pivotal data in early Q4 2026, potential FDA De Novo submission in late Q4 2026, and we are already beginning the work necessary for a potential launch that would come 150 days plus review cycle time post De Novo filing through the De Novo pathway with the FDA. To summarize, there are four pillars that are driving our conviction in Revita for post GLP-1 weight maintenance. The first is that the clinical signal is real from pilot sham-controlled studies.
The second is that the pivotal is built to win and to deliver data very soon. We see a clear path to commercial value with an alignment of regulatory feedback, reimbursement opportunity, and stakeholder interests in the marketplace, just as CMS is introducing this therapy for patients. Lastly, we are funded through definitive data, $47 million of cash on hand at the end of Q2, enabling us to deliver on pivotal data and De Novo filing without the need for incremental capital raise until those things are done. With that, I will stop and thank everyone for their time.
Before I let everyone go, I will just note that we have a second asset, which is a Rejuva GLP-1, potentially one and done gene therapy program, which will be entering the clinic this half of this year with CTA authorization in Europe and ethics committee approval in Australia and first sites activated as of this month. We see Rejuva's potential for the durable remission of type 2 diabetes, and we will have first dosing and preliminary data by the end of this year. With that, thank you very much. Exciting several months ahead. Look forward to meeting all of you in the conference live.
Perfect, Harith. That was very clear. We look forward to the REMAIN-1 pivotal cohort data in the fourth quarter. With this, I would like to thank Harith and Fractyl for what was a very informative presentation and to all those in the audience who have joined us today. Thanks again from the H.C. Wainwright.