Q1 2024 Fractyl Health Inc Earnings Call

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Operator: Good afternoon, and welcome to Fractyl Health's first quarter 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 Q&A session following management's prepared remarks. I will now turn the call over to Steven Jasper. Steven, you may now begin.

Speaker Change: Good afternoon, and welcome to Frac Doe helps first quarter financial results and business update call.

As a reminder, this conference call is being recorded.

Speaker Change: At this time all participants are in a listen only mode. There will be a Q&A session. Following managements prepared remarks.

Now I'll turn the call over to Stephen Jasper David You May now begin.

Speaker Change: Thank you.

Steven Jasper: This afternoon, we issued a press release that outlines the topics we plan to discuss today. This release is available at www.fractyl.com under the Investors tab. Today on our call, Dr. Harith Rajagopalan, Chief Executive Officer, Lisa Davidson, Chief Financial Officer, Dr. Timothy Kiefer, Chief Scientific Officer, and Adrian Kimber, Chief Commercial Officer, will review our recent business highlights and first quarter financial results.

Speaker Change: This afternoon, we issued a press release that outlines the topics we plan to discuss today.

Speaker Change: This release is available at Www Dot <unk> dot com under the investors tab.

Speaker Change: On our call Dr. <unk>, Gopal Chief Executive Officer, Lisa Davidson, Chief Financial Officer, Dr. Timothy Keeper, Chief Scientific Officer, and Adrian Kimber, Chief Commercial Officer, who will review, our recent business highlights and first quarter financial results.

Steven Jasper: Before we begin, I would like to remind everyone that statements made during this conference call that do not relate to matters of historical fact, including statements about our objectives and anticipated clinical milestones, preclinical or clinical trial data, the impact of any of our product candidates, the design, initiation, timing, and results of clinical enrollment and any clinical trial or readouts, the potential launch or commercialization of any of our product candidates or products, and the sufficiency of our cash Such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act.

Speaker Change: Before we begin I would like to remind everyone that statements made during this conference call that do not relate to matters of historical fact, including statements about our objectives and anticipated clinical milestones preclinical or clinical trial data the impact of any of our product candidates the design initiation timing and results of clinical enrolling.

Speaker Change: And any clinical trial readouts, the potential launch or commercialization of any of our product candidates or products and the sufficiency of our cash cash equivalents and investments to fund our operating activities for any specific period of time should be considered forward looking statements within the meaning of the private Securities litigation reform.

Speaker Change: <unk> of 995.

Speaker Change: Such forward looking statements are intended to be subject to the safe Harbor protection provided by the Reform Act.

Steven Jasper: Actual results could differ materially from those indicated by the forward-looking statements due to the impact of risk, uncertainties, and other important factors. Participants are directed to the risk factors set forth in Fractyl's quarterly report on Form 10-Q for the period ended March 31, 2024, and accompanying other filings with the Securities and Exchange Commission. Any forward-looking statements made today speak only to Fractyl's operations as of today, and Fractyl disclaims any duty to provide updates to its forward-looking statements, even if subsequent events cause the company's views to change. It is now my pleasure to pass the call over to Harith.

Speaker Change: Actual results could differ materially from those indicated by the forward looking statements due to the impact of risks uncertainties and other important factors.

Speaker Change: Participants are directed to the risk factors set forth in <unk> quarterly report on Form 10-Q for the period ended March 31, 2024, and the company's other filings with the Securities and Exchange Commission.

Speaker Change: Any forward looking statements made today speak only to Frac those operations as of today.

Speaker Change: <unk> disclaims any duty to provide updates to its forward looking statements even if subsequent events cause the company's views to change.

Speaker Change: It is now my pleasure to pass the call over to Harry.

Dr. Harith Rajagopalan: Thank you, Steven. And good afternoon, everyone. Thank you for joining us for our first quarterly results call. Over 10 years ago, I co-founded Fractyl with a singular and audacious goal to eradicate metabolic disease. As a physician, I saw firsthand how type 2 diabetes and obesity and their comorbidities impact patients and their families. I witnessed patients experiencing complications of disease despite following all of their doctor's advice, spouses becoming caregivers, and children losing parents far too young to diseases that should be entirely treatable. I knew that there had to be a better way to address these issues by tackling the diseases at their root cause, in the gut and in the pancreas. And thus, Fractyl Health was born.

Harry: Thank you Steven and good afternoon, everyone. Thank you for joining us for our first quarterly results call.

Harry: Over 10 years ago, I, Cofounded fragile with a singular and audacious goal to eradicate metabolic disease as a physician I saw firsthand, how type two diabetes and obesity and their comorbidities impact patients and their families.

Harry: I witnessed patient experienced complications of disease. Despite following all of their doctor's advice spouses, becoming caregivers and children, losing parents far too young to diseases that should be entirely treatable.

Harry: I knew that there had to be a better way to address these issues by tackling the diseases at their root cause in the gut and in the pancreas and thus fractal health was born.

Dr. Harith Rajagopalan: We have always been clear with our vision to develop transformative therapies that can prevent and eliminate metabolic disease. We have never wavered in our focus because we knew that treating the underlying disease is the most patient-centered approach to better long-term health. I am pleased to be here today to present these results because we are so close to achieving the goals we set forth for ourselves a decade ago. 2024 is shaping up to be a pivotal year for Fractyl.

Harry: We have always been clear with our vision to develop transformative therapies that can prevent and eliminate metabolic disease, we have never wavered and our focus because we knew that treating the underlying disease is the most patient centered approach to better long term health.

Harry: I am pleased to be here today to present. These results because we are so close to achieving the goals, we set forth for ourselves a decade ago.

Harry: 2024 is shaping up to be a pivotal year for <unk>. We are executing on our strategy. We are clear about the future and we are ready to bring fragile to the next level to help even more patients around the world.

Dr. Harith Rajagopalan: We are executing on our strategy, we are clear about the future, and we are ready to bring Fractyl to the next level to help even more patients around the world. These therapies are incredibly effective and exciting developments, but they also have significant limitations, their need for chronic administration, their high discontinuation rates, and the dramatic weight regain and loss of metabolic benefits observed as soon as people stop treatment.

Harry: The treatment landscape for metabolic disease has radically changed over these last several years with the emergence of <unk>. One drugs. These therapies are incredibly effective and exciting developments, but they also have significant limitations there need for chronic administration their high discontinuation rates and the dramatic weight.

Harry: Regain and loss of metabolic benefits observed as soon as people stopped treatment.

Dr. Harith Rajagopalan: To address this unmet need, we are developing transformative therapies that precisely target and alter the function of the diseased organs that are responsible for the development of obesity and type 2 diabetes. In a world with potent drugs that still do not eliminate disease, we believe the clinical and economic value proposition is shifting now from chronic disease management to the prevention and remission of underlying disease. Our two platforms, REVITA and REJUVA, target dysfunction in the duodenum and pancreas, respectively, and are designed to provide long-term metabolic benefits from a single administration.

Harry: To address this unmet need we are developing transformative therapies that precisely target and alter the function of the diseased organs that are responsible for the development of obesity and type two diabetes.

Harry: In a world with potent drugs that still do not eliminate disease, we believe the clinical and economic value proposition is shifting now from chronic disease management to the prevention and remission of underlying disease.

Harry: Our two platforms <unk> and rejuvenate target dysfunction in the duodenum and pancreas, respectively and are designed to provide long term metabolic benefits from a single administration.

Dr. Harith Rajagopalan: Our Revita platform is a proprietary device and delivery system that targets the duodenum to reverse pathology in the duodenal lining that is a root cause of obesity and type 2 diabetes. Revita uses heat energy to ablate dysfunctional duodenal mucosa to enable the regeneration and renewal of the duodenum and restore normal metabolic signaling from the gut. The procedure takes less than 45 minutes, and patients can immediately return to their daily

Harry: Our <unk> platform is a proprietary device and delivery system that targets the duodenum to reverse pathology in the duodenal lining that as a root cause of obesity and type two diabetes repeater uses heat energy to ablate dysfunctional duodenal mucosa to enable the regeneration and renewal of the.

Harry: <unk> and restore normal metabolic signaling from the gut the.

Harry: The procedure takes less than 45 minutes and patients can immediately returned to their daily lives.

Dr. Harith Rajagopalan: We have received breakthrough device designation from the FDA for Ruvita and have evaluated it in over 300 patients across multiple clinical studies and have observed over 500 patient years of exposure data demonstrating favorable tolerability as well as favorable and durable impact on blood sugar and body weight. Focusing on obesity, Despite the popularity of GLP-1 drugs, approximately half of the people who start taking them stop them within one year for a variety of reasons. We believe that what the world needs now is a safe, reliable, and effective off-ramp from GLP-1s.

Harry: We have received breakthrough device designation from the FDA for <unk> and have evaluated it in over 300 patients across multiple clinical studies and have observed over 500 patient years of exposure data demonstrating favorable tolerability as well as favorable and durable impact on blood sugar and body weight.

Harry: Focusing on obesity.

Harry: Despite the popularity of <unk>, one drugs approximately half of the people who start taking them stop them within one year for a variety of reasons we.

Harry: We believe that what the world needs now is a safe reliable and effective off ramp from GOP ones, an off ramp that allows weight loss to persist even as people stopped taking these medicines.

Dr. Harith Rajagopalan: An off-ramp that allows weight loss to persist even as people stop taking these medicines. This is where the unmet need in obesity has shifted from how do you lose weight to how do you keep it off. A Wall Street Journal feature article last week pointed to weight regain as the major problem in obesity management today.

Harry: This is where the unmet need in obesity has shifted from how do you lose weight to how do you keep it off.

Harry: Wall Street Journal feature article last week pointed to wait regain as the major problem in obesity management today and it featured a patient who underwent the <unk> procedure approximately one year ago in Germany, and who still has durable improvements in body weight and blood sugar today.

Dr. Harith Rajagopalan: And it featured a patient who underwent the Revita procedure approximately one year ago in Germany and who still has durable improvements in body weight and blood sugar today. We, as a company, have always been focused on durable metabolic benefits, and we believe that we are uniquely well positioned to become leaders in addressing this need in obesity management today. At the end of March, we received IDE approval from the FDA for Rovita's Remain 1 study in patients with obesity who wish to maintain weight loss after discontinuing GLP-1 treatment.

Harry: We as a company have always been focused on durable metabolic benefits and we believe that we are uniquely well positioned to become leaders in addressing this need in obesity management today.

Harry: At the end of March we received IDE approval.

Harry: Approval from the FDA for review does remain one study in patients with obesity, who wish to maintain weight loss after discontinuing <unk> treatment.

Dr. Harith Rajagopalan: The approval from the FDA to begin this pivotal study came earlier than we had expected, and we are excited about our rapid alignment on this pivotal IDE. We believe this is due to the growing recognition of obesity as a disease and the heightened urgency that has emerged for therapeutic alternatives that do not depend upon lifelong pharmacotherapy. We expect to initiate the study in the second half of the year. We firmly believe that freedom from disease is the ultimate aspiration for people and patients.

Harry: The approval from the FDA to begin this pivotal study came earlier than we had expected and we are excited about our rapid alignment on this pivotal ITE. We believe it is a result of the growing recognition of obesity as a disease and the heightened urgency that has emerged for therapeutic alternatives that do not depend upon lifelong pharmacotherapy.

We expect to initiate this study in the second half of the year.

Harry: We firmly believe that freedom from disease as the ultimate aspiration for people and patients is successful. The remaining one study would allow <unk> to offer millions of people the potential for durable weight loss maintenance without the burden of ongoing medical therapy.

Dr. Harith Rajagopalan: If successful, the REMAIN-1 study would allow Revita to offer millions of people the potential for durable weight loss maintenance without the burden of ongoing medical therapy. We are also currently evaluating Revita in our Revitalize 1 pivotal trial in patients with inadequately controlled type 2 diabetes. We expect to complete enrollment in the second quarter and share top-line data in the fourth quarter of this year.

Harry: We are also currently evaluating <unk> in our revitalized one pivotal trial in patients with inadequately controlled type two diabetes, we expect to complete enrollment in the second quarter and share top line data in the fourth quarter of this year.

Dr. Harith Rajagopalan: In Europe, Revita has a CE mark and has secured reimbursement authorization in Germany. We have initiated a commercial pilot launch to conduct a real-world registry study in Germany as we complete our pivotal trials in the United States. We anticipate that registry data, combined with U.S. pivotal data, will be valuable tools to demonstrate the potential impact of Revita on patients and payers. This morning, we shared data from this real-world study at the German Diabetes Association Annual Meeting.

Harry: In Europe, <unk> has a CE mark and has secured reimbursement authorization in Germany, we have initiated a commercial pilot launch to conduct a real world Registry study in Germany, as we complete our pivotal trials in the United States, We anticipate that registry data combined with the U S pivotal data will.

Harry: Valuable tools to demonstrate the potential impact of reveal to patients and payers.

Harry: This morning, we shared data from this real World study at the German Diabetes Association annual meeting and we found that <unk> demonstrated substantial and sustained improvements in blood sugar and body weight through six months of follow up so far in patients who have enrolled in the German registry.

Dr. Harith Rajagopalan: And we found that Revita demonstrated substantial and sustained improvements in blood sugar and body weight through six months of follow-up so far in patients who have enrolled in the German registry. What is particularly exciting about this registry experience is the feedback from patients themselves, the sense that Revita has offered them a new lease on life and a new hope to live a life that is not defined by their disease. Tim will tell you more about these new data and our clinical development progress, and then Adrian will provide perspective on Revita's commercial opportunity in just a few moments, turning to our REJUVA platform.

Harry: What is particularly exciting about this registry experience as the report from patients themselves. The sense that <unk> has offered them a new lease on life and a new hope to live a life that is not defined by their disease.

Harry: Tim will tell you more about those new data and our clinical development progress and then Adrian will provide perspective on <unk> commercial opportunity in just a few moments.

Speaker Change: Now <unk>.

Speaker Change: Turning to our rejuvenate platform.

Dr. Harith Rajagopalan: REJUVA is our locally-administered, AAV-delivered, pancreatic gene therapy platform delivering metabolic hormones, including GLP-1, and is designed to enable long-term remission of type 2 diabetes and obesity by durably altering hormone function in the pancreas. At the beginning of this year, we announced our first REJUVA candidate for type 2 diabetes, REJUVA 001, a one-time, locally administered AAV9 viral vector that expresses GLP-1 hormone with an insulin promoter that is designed to durably improve pancreatic function in type 2 diabetes.

Speaker Change: <unk> is our locally administered AAV delivered pancreatic gene therapy platform, delivering metabolic hormones, including GOP, one and is designed to enable long term remission of type two diabetes and obesity by durably altering hormone function in the pancreas.

Speaker Change: At the beginning of this year, we nominated our first Rejuvenesce candidate for type two diabetes reduce 001, a one time locally administered AAV nine viral vector that expresses <unk> hormone within insulin promoter that is designed to durably improve pancreatic function in type two diabetes.

Dr. Harith Rajagopalan: We expect to initiate our first in-human trials in type 2 diabetes in the first half of 2025. We are also working to nominate our first candidate for a one-time treatment for obesity, which we are planning to announce in the back half of 2024. With that, I'll now turn the call over to Tim to provide additional color on the progress we are making across both our Revita and Rejuva platforms.

Speaker Change: We expect to initiate our first in human trials in type two diabetes in the first half of 2025.

We are also working to nominate our first candidate for a onetime treatment for obesity, which we are planning to announce in the back half of 2024.

Speaker Change: With that I'll now turn the call over to Tim to provide additional color on the progress, we're making across both our <unk> and Richard <unk> platforms.

Speaker Change: Tim.

Tim: Thank you Harry prior.

Dr. Timothy Kiefer: Prior to joining Fractyl Health as CSO, I was a professor in the Faculty of Medicine at the University of British Columbia and CSO at BioCite. Given my training in gastrointestinal hormones and islet biology, I'm a passionate believer in Fractyl's therapeutic approaches targeting the gut and pancreas, the key metabolic organs where dysfunction is a root cause of diabetes and obesity. I'll begin with a review of the Revita platform progress and then turn to Rejuva.

Tim: Prior to joining practical help the CSO.

Tim: The faster and the faculty of Medicine at the University of British Columbia, and CFO of buyer side, given my training and gastrointestinal hormones and ILEC biology, I'm, a passionate believer on fractals therapeutic approaches targeting <unk> and pancreas, the key metabolic Oregon's where dysfunction as a root cause.

Tim: Cause of diabetes and obesity.

Tim: I'll begin with a review of Revere platform progress and then turn to rejuvenate.

Dr. Timothy Kiefer: As previously mentioned, we recently provided an update from our ongoing real-world German registry study of Revita in patients with type 2 diabetes at the German Diabetes Association annual meeting. In 14 participants, where we have six months of post-revital follow-up, there was an average body weight loss of 8.1% that was generally sustained through six months thus far, and a fall from median baseline blood glucose levels of 153 milligram per deciliter to 116, accompanied by a hemoglobin A1c dropping from 9.2 to 7.6.

Tim: As previously mentioned, we recently provided an update from our ongoing real World Chairman Registry study of <unk> in patients with type two diabetes at the German diabetes Association annual meeting.

Tim: And 14 participants where we have six months of post review to follow up there was an average body weight loss of eight 1% that was generally sustained through six months, thus far and the fall from median baseline blood glucose levels of 153 milligram per <unk>.

Tim: Deciliter to 116, accompanied by a hemoglobin <unk> C dropping from nine to seven six.

Dr. Timothy Kiefer: These are particularly exciting findings given these are patients with advanced type 2 diabetes who have been unable to control their diabetes through the use of multiple medications or lifestyle changes. We plan to continue enrolling patients in this registry and to provide updates on an ongoing basis.

Tim: These are particularly exciting findings given these are patients with advanced type two diabetes.

Tim: Unable to control their diabetes through the use of multiple medications or lifestyle changes.

Tim: We plan to continue enrolling patients in this registry and to provide updates on an ongoing basis.

Dr. Timothy Kiefer: In March, we received IDE approval to initiate REMAIN-1, a two-part parallel cohort study for weight maintenance in patients with obesity who have lost at least 15% of their total body weight on GLP therapy and wish to discontinue GLP-1 without weight regain. Alongside this, we will have our Reveal 1 open label cohort of patients who will be managed in exactly the same way, and we expect to begin providing open label study updates in the second half of the year.

Tim: In March we received <unk> approval to initiate remain one two part parallel cohort study for weight maintenance in patients with obesity, who have lost at least 15% total body weight on GOP Cherokee and wish to discontinue GOP one without.

Tim: Regain.

Tim: Alongside we will have our reveal one open label cohort of patients who will be managed in exactly the same way and we expect to begin providing open label study update in the second half of the year.

Dr. Timothy Kiefer: With the Remain 1 study, we hope to evaluate how Revita can enable patients to maintain clinically meaningful weight loss durably after discontinuing from GLP-1. We plan to evaluate 315 patients with a BMI of 30 or higher without diabetes who are GLP-1 drug nave. We will have an initial run-in period where patients are placed on GLP-1 to achieve at least 15% total body weight loss, at which point they will then discontinue GLP-1 and be double blinded and randomized 2 to 1 to either receive the Revita procedure or a sham treatment, and we will evaluate weight regain at 24 after 48 weeks.

Tim: With the remaining one study we hope to evaluate how <unk> can enable patients to maintain clinically meaningful weight loss durably after discontinuing <unk>.

Tim: We plan to evaluate 315 patients with a BMI of 30 or higher without diabetes, who are GOP one chunk naive.

Tim: We will have an initial run in period, where patients are placed on a <unk> one to achieve at least 15% total body weight loss at which point. They will then discontinue the GL Q1 and be double blinded and randomized two to one to either receive the <unk> procedure or sham treatment and we will evaluate.

Tim: <unk> regained at 24 and 48 weeks.

Dr. Timothy Kiefer: We also plan to look at whether cardiovascular risk or glucose levels rebound after discontinuation of GLP-1 therapy. We expect this trial to enroll quickly as it appeals to three distinct groups of patients versus those who are currently on AGOP1 and losing weight but wish to discontinue due to side effects. Second, those who are currently on GLP-1 and losing weight and aren't experiencing side effects but are looking for an off-ramp so they don't have to stay on chronic medication.

Tim: We also plan to look at whether cardiovascular risk or glucose levels rebound after discontinuation of the <unk> therapy.

We expect this trial to enroll quickly as it appeals to three distinct groups of patients.

Tim: Those who are currently on <unk>, and losing weight, but wish to discontinue due to side effects.

Tim: And those who are currently on <unk>, and losing weight and arent experiencing side effects, but are looking for an off ramp.

Tim: Don't have to stay on chronic medications.

Dr. Timothy Kiefer: And third, patients who don't even want to begin GLT1 therapy due to the chronic regimen. Now, in March 2021, we commenced our revitalized one, randomized, double-blind, crossover, sham-controlled, multi-center pivotal study in patients with inadequately controlled type 2 diabetes despite being on up to three glucose-lowering agents and valence. The study will evaluate the change from baseline in hemoglobin A1c at 24 weeks in approximately 320 patients with additional follow-up through 48 weeks. We anticipate completing enrollment in the first half of this year and will report top-line results in the fourth quarter.

Tim: And third patients, who don't even want to begin <unk> therapy due to the chronic rational.

Tim: Now in March 2021, we commenced our revitalized one randomized double blind crossover Sham controlled multicenter pivotal study in patients with an adequately control of type two diabetes, despite being on up to three glucose lowering agents and daily insulin.

Tim: The study will evaluate the change from baseline in hemoglobin <unk> C. At 24 weeks in approximately 320 patients with additional follow up through 48 weeks.

Tim: We anticipate completing enrollment in the first half of this year and we will report top line results in the fourth quarter.

Dr. Timothy Kiefer: We have discussed this study design with the FDA and believe that if successful, the data may support a PMA for Revita to improve glycemic control in patients with type 2 diabetes who are inadequately controlled on insulin. Now, moving on to Rejuva.

Tim: We have discussed this study design with the FDA and believe if successful the data may support a PMA for Vida to improve glycemic control in patients with type two diabetes, who are inadequately controlled on insulin.

Tim: Now moving on to reduce.

Adrian Kimber: We have evaluated potential GOP1 pancreatic gene therapy candidates in large and small animal studies. In a head-to-head preclinical diet-induced obesity mouse model, we observed our GLP-1 pancreatic gene therapy candidates to produce greater improvements in weight loss compared to semiglutides, durable improvements in weight loss compared to vehicle control, and the potential weight maintenance solution to prevent weight regain after semaglutide discontinuation. We plan to complete IND-enabling studies, or its equivalent, for REJUVA-001 in the second half of 2024 and, pending approval, initiate a first in-human study in the first half of 2025.

Tim: We have evaluated potential <unk> pancreatic gene therapy candidates in large and small animal studies and.

Tim: In a head to head preclinical diet induced obesity mouse model, we have observed <unk> pancreatic gene therapy candidates to produce greater improvements in weight loss compared to <unk> <unk>.

Terrible improvements in weight loss compared to vehicle control and the potential weight maintenance solution to prevent weight regain after semi grew tired discontinuation.

Tim: We plan to complete IND, enabling studies or its equivalent per <unk>, while in the second half of 2024 and pending approval initiate our first in human study in the first half of 2025.

Adrian Kimber: In addition, we plan to continue working towards nominating our first GLP-1 pancreatic gene therapy candidate for obesity. With that, I will now turn the call over to Adrian to give you an update on our commercial opportunity.

Tim: In addition, we plan to continue working towards nominating our first GOP, while pancreatic gene therapy candidate for obesity.

Tim: With that I will now turn the call over to Adrian to give you an update on our commercial opportunity.

Tim: Adrian.

Adrian Kimber: Thank you, Tim, and good afternoon, everyone. Since joining the Fractyl team a few months ago, I've been consistently impressed by our people, our science, and our technology. My short tenure here has only strengthened my initial belief that Roveta represents a significant opportunity, both clinically and commercially. It's evident that there's a significant issue with weight maintenance within our society. In recent times, GOP1 therapies have been widely prescribed by physicians and adopted by patients to tackle this very issue.

Adrian Kimber: Thank you Tim and good afternoon, everyone since.

Adrian Kimber: Since joining the Fraxel team a few months ago I've been consistently impressed by our people our science and our technology.

Adrian Kimber: My short tenure here has only strengthened my initial belief that repeat it represents a significant opportunity both clinically and commercially.

Adrian Kimber: However, despite the widespread coverage by insurance and the observed benefits of weight loss and glucose reduction, over 50% of patients discontinued GLP-1 therapy within the first year. When examining obesity, it's staggering to note that nearly 100 million individuals in the United States suffer from obesity and prediabetes, while globally this number surpasses 800 million. Now turning to type 2 diabetes, there are over 500 million adults grappling with this condition worldwide. Within the United States alone, 27 million individuals are on medication for type 2 diabetes, with over 4 million relying on insulin therapy for advanced type 2 diabetes. In 2022, approximately $65 billion was allocated to drugs targeting glucose control and weight management. Notably, all of these expenses were tied to medications necessitating chronic administration, yet non-effectively addressed the underlying disease progression.

Adrian Kimber: It's evident that the significant issue with weight maintenance within our society.

Adrian Kimber: In recent times GOP, one therapies have been widely prescribed by physicians.

Adrian Kimber: Dr by patients to tackle this very issue.

Adrian Kimber: However, despite the widespread coverage by insurance and the observed benefits of weight loss and glucose reduction over 50% of patients discontinued <unk> therapy within the first year.

Adrian Kimber: When examining obesity is staggering to note that nearly 100 million individuals in the United States suffer from obesity and pre diabetes.

Adrian Kimber: Globally, this number surpassed $800 million.

Adrian Kimber: Now turning to type two diabetes that over 500 million adults grappling with this condition worldwide.

Adrian Kimber: Within the United States alone 27 million individuals are on medications for type two diabetes with over $4 million relying on insulin therapy for advanced type two diabetes.

Adrian Kimber: In 2022, approximately $65 billion was allocated to drugs targeting glucose control and weight management.

Adrian Kimber: Notably all of these expenses were tied to medications, necessitating chronic administration, yet not effectively address the underlying disease progression.

Adrian Kimber: We perceive this as an immense opportunity and firmly believe that Rovita holds a distinctive position to capitalize on it by tackling disease progression and prevention. For individuals currently managing type 2 diabetes with medications and insulin, Ravena aims to enhance glucose control and halt or slow down the disease's progression. Moreover, for those with pre-diabetes and obesity, Roveta is engineered to target the metabolic dysfunction at its source, mitigating the risk of individuals progressing to type 2 diabetes and obesity.

Adrian Kimber: We perceive this as an immense opportunity and firmly believe that repeat of holiday distinctive position to capitalize on this by tackling disease progression and prevention.

Adrian Kimber: Individuals' currently managing type two diabetes with medications and insulin <unk>.

Adrian Kimber: <unk> aims to enhance glucose control and how or slow down the disease of advancement.

Adrian Kimber: Moreover, for those with pre diabetes and obesity.

Adrian Kimber: Engineered to target the metabolic dysfunction added source mitigating the risk of individuals' progressing to type two diabetes and obesity.

Adrian Kimber: Revita is a modular system, seamlessly integrated into an endoscopist's workflow, typically requiring fewer than four cases for the endoscopist to achieve proficiency. It is tailored as an outpatient procedure, manageable by a trained therapeutic endoscopist in under an hour. In the United States alone, nearly 20 million endoscopies are conducted annually, with over 600,000 categorized as advanced endoscopic procedures carried out by almost 10,000 gastroenterologists. The RAVITA procedure is specifically designed as a straightforward addition to the 4.7 million endoscopies already administered annually to patients with type 2 diabetes.

Adrian Kimber: <unk> is a modular system.

Adrian Kimber: We integrated into Endoscopist workflow typically requiring fewer than four cases will be endoscopist to achieve proficiency.

Adrian Kimber: It is tailored as an outpatient procedure manageable by a trained therapeutic endoscopist in under an hour.

Adrian Kimber: In the United States alone nearly $20 million Endoscopies are conducted annually with over 600000 categorize it as advanced endoscopic procedures carried out by almost 10000 gastroenterologists.

Adrian Kimber: The repeat the procedure is specifically designed as a straightforward addition to the $4 7 million endoscopies already administered annually to patients with type two diabetes.

Adrian Kimber: As Harith mentioned, Revita has a CE mark in Europe, and we initiated a limited commercial pilot program at a single site in Germany last year to gather real-world data as we complete our US pivotal studies. As we progress our Rabida clinical program, we plan to build out a U.S.-based direct sales force and commercial organization to support our U.S. launch ahead of Rabida's potential FDA approval. Our commercialization strategy involves implementing a hub-and-spoke approach to establish Revita as an innovative procedural therapy for addressing obesity and type 2 diabetes.

Adrian Kimber: As <unk> mentioned, we're beta has a CE mark in Europe, and we initiated a limited commercial pilot program at a single site Jimmy last year together railroad data as we complete our U S pivotal studies.

Adrian Kimber: As we progress our repeat a clinical program with.

Adrian Kimber: Plan to build out a U S based direct sales force and commercial organization to support our U S launch it had ever been as a potential FDA approval.

Adrian Kimber: Our commercialization strategy involves implementing a hub and spoke approach to establish <unk> as an innovative procedural therapy for addressing obesity and type two diabetes.

Adrian Kimber: And initially, we'll concentrate on centers of excellence housing advanced therapeutic endoscopists with a primary focus on engaging participating physicians from our clinical studies. And furthermore, we'll introduce a comprehensive procedural training support program tailored for GI and endoscopists, ensuring Roveta seamlessly integrates into their workflow. With that, I will now pass the call on to Lisa to give an update on our first quarter financials.

Adrian Kimber: And initially we will concentrate on our centers of excellence housing advanced therapeutic endoscopist.

Adrian Kimber: With a primary focus on engaging participating physicians from our clinical studies.

Adrian Kimber: Furthermore, we will introduce a comprehensive procedural trading so core program tailored for Gi endoscopist, ensuring a repeat of seamlessly integrates into that workflow.

Adrian Kimber: With that I will now pass the call onto lease to give an update on our first quarter financials.

Adrian Kimber: So.

Lisa Davidson: Thank you, Adrian. In the first quarter of 2024, revenue was generated from our commercial pilot in Germany, which launched in the first half of 2023. Turning to operating expenses, research and development expense in the first quarter of 2024 was $14.4 million, compared to $9.3 million for the same period in 2020. The increase during the quarter was primarily due to increased investment in the Revitalize 1 clinical study, advancement of the REJUVA program, and increased personnel-related expenses, including stock-based compensation.

Lease: Thank you Adrienne and the first quarter of 2024 revenue was generated from our commercial pilot in Germany, which launched in the first half of 2023.

Lease: Turning to operating expenses research and development expense in the first quarter of 2024 was $14 4 million compared to $9 3 million for the same period in 2023.

Lease: The increase during the quarter was primarily due to increased investment in the revitalized one clinical study advancement of the virtue of our program and increased personnel related expenses, including stock based compensation.

Lisa Davidson: Selling general and administrative expenses in the first quarter of 2024 were $7.1 million compared to $2.8 million in the same period in 2023. The increase was primarily due to increased personnel-related expenses, including stock-based compensation and professional services expenses and other costs associated with operating as a publicly traded company. For the first quarter of 2024, we reported a net loss of $3.3 million compared to a net loss of $11.9 million for the same period in 2023.

Lease: Selling general and administrative expense in the first quarter of 2024 was $7 1 million compared to $2 8 million in the same period in 2023.

Lease: The increase was primarily due to increased personnel related expenses, including stock based compensation and professional services expenses and other costs associated with operating as a publicly traded company.

Lease: For the first quarter of 2024, we reported a net loss of $3 3 million compared to a net loss of $11 9 million for the same period in 2023. The decrease in net loss was primarily related to a $17 1 million noncash decrease in fair value of the notes payable and borrowings on our balance sheet.

Lease: <unk> 7 million increase in interest income earned offset by an increase of $9 4 million in operating expenses.

Lisa Davidson: The decrease in net loss was primarily related to a $17.1 million non-cash decrease in the fair value of the notes payable and warrants on our balance sheet, and a $0.7 million increase in interest income earned, offset by an increase of $9.4 million in operating expenses. As of March 31st, 2024, we had cash and cash equivalents of $121.4 million. Based on our current development plans, we believe cash and cash equivalents will be sufficient to fund our operations through expected key company milestones through 2025. I will now turn the call back to Harit.

Lease: As of March 31, 2024, we had cash and cash equivalents of $121 4 million.

Lease: Based on our current development plans, we believe cash and cash equivalents will be sufficient to fund our operations there expected key company milestones through 2025.

Lease: I'll now turn the call back to Harry.

Harry: Thank you Lisa.

Dr. Harith Rajagopalan: Fractyl is at a critical point in our growth trajectory. As you heard from Tim, our two platforms, Revita and Rejuva, have the potential to help us realize our vision of creating durable, disease-modifying therapies that target the organ-level root causes of obesity and type 2 diabetes, with key catalysts coming in the next several quarters across both of our programs in both disease categories. And, as Adrian told you, there is a significant unmet need in this market for this type of therapy.

Fractal is at a critical point in our growth trajectory as you heard from Tim our two platforms <unk> and rejuvenate and have the potential to help us realize our vision of creating durable disease modifying therapies that target the Oregon level root causes of obesity and type two diabetes.

Harry: With key catalysts coming in the next several quarters across both of our programs in both disease categories and as Adrian told you. There is significant unmet need in this market for this type of therapy.

Dr. Harith Rajagopalan: Fractyl is a different company with a different approach, which we believe meets the needs that are identified by the obesity and type 2 diabetes patient communities for better health with less medicine. For the remainder of 2024, we are focused on executing on our clinical studies in Type 2 Diabetes and Obesity, formulating our commercialization plans to introduce Revita to the U.S. and European markets, advancing REJUVA-001 through IND-enabling studies, and efficiently allocating our capital to ensure that we have the runway that we need to meet all of our objectives.

Harry: <unk> is a different company with a different approach, which we believe meets the needs that are identified by the obesity and type two diabetes patient communities for better health with less medicine.

Harry: For the remainder of 2024, we are focused on executing on our clinical studies in type two diabetes and obesity formulating our commercialization plans to introduce <unk> to the U S and European markets advancing <unk> through IND, enabling studies and efficiently allocating our capital to ensure that.

Harry: We have the runway that we need to meet all of our objectives.

Dr. Harith Rajagopalan: It is an incredibly exciting time at Fractyl, and I would like to take a moment to thank the patients and the physicians who have supported us over the past 10 years. We deeply appreciate your trust in us and in our mission. I would also like to acknowledge the hard work and dedication of my fellow Fractylians. They spend a tremendous amount of time and energy focused on helping us achieve our mission and vision, and we truly appreciate their efforts to build something great together.

Speaker Change: It is an incredibly exciting time at <unk> and I would like to take a moment to thank the patients and the physicians who have supported us over the past 10 years, we deeply appreciate your trust in us and in our mission.

Speaker Change: I would also like to acknowledge the hard work and dedication of my fellow for Actelion. They spur.

Speaker Change: Learned a tremendous amount of time and energy focused on helping us achieve our mission and vision and we truly appreciate their efforts to build something great together.

Dr. Harith Rajagopalan: And finally, I'd like to thank you for your continued interest and your support of Fractyl. We look forward to sharing updates on our progress as we work toward bending the curve of metabolic disease globally. And with that, we will now open the call to questions. Thank you very much.

Speaker Change: And finally.

Speaker Change: I'd like to thank you for your continued interest and your support of fractal, we look forward to sharing updates on our progress as we work towards bending the curve of metabolic disease globally and.

Speaker Change: And with that we will now open the call up to questions. Thank you very much.

Operator: Thank you. As a reminder to ask a question, you will need to press star 11 on your telephone. To remove yourself from the question queue, you may press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jason Gerberi, from Bank of America.

Speaker Change: Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from the question queue. You May press Star one again.

Speaker Change: Standby, while we compile the Q&A roster.

Speaker Change: Our first question comes from the line of Jason <unk> of Bank of America.

Chi: Hey, this is Chi. I'm for Jason.

Speaker Change: Hey.

Speaker Change: Key on for Jason Thanks for taking our questions.

Jason: I have two on the two questions on the real World Registry study and one on <unk>.

Chi: Thanks for taking our questions. I have two on the two questions on the real world registry study and one on REJUVA. So, I'm curious about the real world registry study. Can you talk about how similar the patients enrolled in the study relative to those enrolled in the revitalized one? What proportion of the patients were on insulin for the registry study? Curious if the data from the real world registry study can be extrapolated to revitalize the study in some way.

Jason: So I'm curious on the real World Registry study can you talk about how some of the patient.

Speaker Change: Steady relative to tell us that umbrella.

Speaker Change: <unk>, one what proportion of the patients were on its own.

Speaker Change: What about the registry study curious if that data from the real World Registry study can be extrapolated to revitalize steady in some way.

Chi: A 2nd question on the same study is you have provided 3 month and 6 month follow-up data from the same study. I'm curious if you can talk about durability of the data with respect to HBA1C reduction as well as weight loss. Are those data in line with your expectation? And do you expect the durability to translate into revitalize one and review one slash remain one respectively? And lastly, on REJUVA, you talk about you looking to nominate your first gene therapy candidate for obesity. I'm curious what attributes you are looking for in the obesity candidate. How might that be similar or different than REJUVA001 that you have selected for diabetes? Thank you.

Speaker Change: Second question on the same steady adds you have provide three months six months follow up data from the same study.

Speaker Change: I'm curious if you can talk about durability up the data with respect to HBA <unk> reduction as well as weight loss.

Speaker Change: Data in line with your expectation and do you expect that to work tirelessly to translate into a revitalized one MPV one slash remain one respectively.

Speaker Change: And by lastly on breakthrough.

Speaker Change: You talk about you look to nominate our first gene therapy candidate for obesity I'm curious what attributes are looking for the.

Speaker Change: Obesity candidate, they how might that be similar or different than what you've seen royalty or one think you have selected for diabetes. Thank you.

Chi: Thanks, Chi. I look forward to seeing you later this week at the BAML conference in Vegas. We're heading out tomorrow. I'm not sure if you're there yet.

Speaker Change: Thanks Chi I look forward to seeing you later this week at the <unk> Conference in Vegas, we're heading out tomorrow in Australia are there yet.

Chi: We are there, Jason is traveling in, but we look forward to hosting.

We are there Jason is traveling in but we look forward to hosting you awesome. We're looking forward to that as well it would be my first time attending our Investor Conference in Vegas, but thanks for your questions.

Dr. Harith Rajagopalan: Awesome. We're looking forward to that as well. It will be my first time attending an investor conference in Vegas, but thanks for your questions. So let's talk about the real-world registry first. I'll tackle it, and then I'll ask Tim if he has anything that he would add.

Speaker Change: So let's talk about the real World Registry first I will.

Speaker Change: I'll tackle them and then and then I'll ask him. If he has anything that you would add.

Dr. Harith Rajagopalan: Your first question was whether it's a similar patient population to the revitalized one, and I'll say that it is a similar patient population, but it's a larger cohort of individuals than that. In Europe, our CE mark covers patients who are inadequately controlled with type 2 diabetes who are failing at least one glucose-lowering agent. That affords us an opportunity to have the ability to treat people across the spectrum of medical therapies. For example, there are roughly 20% of patients with type 2 diabetes who are on insulin.

Speaker Change: Your first question was whether it's a similar patient population to revitalize one and I will say that it isn't similar patient population, but it is a larger cohort of individuals than that in Europe. Our CE Mark covers patients who are inadequately controlled with type two diabetes, who are failing at least one glucose lowering agent.

Speaker Change: That affords us an opportunity to have an ability to treat people across the spectrum of medical therapies.

Speaker Change: And.

Speaker Change: There are roughly 20% of patients with type two diabetes, who are on insulin theres a little bit more than that who are on insulin who have entered the revitalized. One study I don't have an exact number for you on how many of them are on insulin and what's interesting about this is that we thought.

Dr. Harith Rajagopalan: There's a little bit more than that who are on insulin who have entered the Revitalize 1 study, but I don't have an exact number for you of how many of them are on insulin. And what's interesting about this... is that we thought, you know, naturally that people with more advanced disease would be more interested in undergoing Revita. And as it turns out, there is an interest that seems to be very broad. People who are on one or two medicines seem just as interested in Revita as people who are on multiple medicines. And we might be inclined to think that this is like people are driven to choose a procedural therapy when they have exhausted all other medical options.

Speaker Change: Naturally that people with more advanced disease would be more interested in undergoing rubina and as it turns out there is interest that seems to be very broad based.

Speaker Change: People, who are on one or two medicine seem just as interested in <unk> as people who are on multiple medicines and we might be inclined to think that this is like people are driven to choose a procedural therapy. When they have exhausted all other medical all other medical options, but as it turns out many people are wanting to try something that addresses the root cause.

Dr. Harith Rajagopalan: But as it turns out, many people are wanting to try something that addresses a root cause even before progressing to what might be considered advanced therapies that are already in the guidelines. So that is an interesting learning for the market and speaks to the potential direction that Revita might go in type 2 diabetes as it progresses in its development over time. You also asked about whether it might translate to the Revitalize 1 patient population in the results that we might expect to see.

Speaker Change: Even before progressing to what might be considered advanced therapies that are already in the guidelines. So that is an interesting learning for the market and speaks to the potential direction that <unk> might go in type two diabetes as it progresses and its development over time.

Speaker Change: You also asked about whether it might translate to the revitalized one patient population.

Speaker Change: In the results that we might expect to see I think that our observation has always been that the.

Dr. Harith Rajagopalan: I think that our observation has always been that the hemoglobin A1c lowering, which is the primary endpoint in Revitalize 1, tracks with patients' baseline hemoglobin A1c in our prior studies and in Revitalize 1 and does not seem to depend on their background medical therapy. And so, in that regard, I do think that this provides good complementary evidence to Revitalize 1. We're optimistic about sharing data from both the registry as that matures plus Revitalize 1 with physicians, patients, and payers as we think about a global launch in a couple of years.

Speaker Change: Hemagglutinate Muncie, lowering which is the primary endpoint and revitalized one tracks with patients baseline hemoglobin, even see in our prior studies and in revitalized one and does not seem to depend on their background medical therapy and so in that regard I do think that.

Speaker Change: This provides good complementary evidence to revitalize one we're optimistic about sharing data from both the registry as that matures plus revitalized one with physicians with patients and with payers as we think about a global launch in a couple of years.

Dr. Harith Rajagopalan: Your next question about the real-world registry was about three- and six-month follow-up. Yes, we have provided that. You can see that there are sustained improvements in blood sugar and in weight. And that is observed – we observe it within one month, and it seems sustained by three and six months so far.

Speaker Change: Your next question about the real World Registry was about three and six month follow up yes. We have provided that you can see that they are sustained improvements in blood sugar and in weight.

Speaker Change: And that is observed we observe it within one month and it seemed sustained by three and six months. So far as we have said before we're going to continue to give registry updates as the dataset mature.

Dr. Harith Rajagopalan: As we have said before, we're going to continue to give registry updates as the data set matures, and you can expect to hear more from us on that registry data set in Q3 and Q4 as the year progresses. Whether that will translate to, well, I think that it is very reasonable to expect that HbA1c and WAIT results in the registry would translate. I think type 2 diabetes in Germany has a lot of the same features as type 2 diabetes in the United States.

Speaker Change: And you can expect to hear more from us on that registry data set in Q3 and Q4 as the year progresses.

Speaker Change: Whether that will translate to.

Speaker Change: I think that.

Speaker Change: It is very reasonable to expect that.

Speaker Change: <unk> C and weight results in the registry would translate.

Speaker Change: Type two diabetes in Germany has a lot of the same features as type two diabetes in the United States. One of the things that we are very keen to understand as Im sure. You are too is like what is the durability of <unk> treatment will it re treatment be appropriate and necessary and what will that frequency b and we're excited about the registry to help us answer those questions.

Dr. Harith Rajagopalan: One of the things that we are very keen to understand, as I'm sure you are too, is how durable a Ravita treatment is? Will a re-treatment be appropriate and necessary, and what will that frequency be?

Dr. Harith Rajagopalan: And we're excited about the registry to help us answer those questions as we have more patients with longer-term follow-up. Now moving to your third question on Rejuva, the obesity candidate, and its similarities versus differences for type 2 diabetes, what we have stated before is that the REJUVA001 candidate for type 2 diabetes has the human insulin promoter driving the human GLP-1 sequence. The human GLP-1 peptide has a very short half-life in the circulation, and its actions on blood sugar are local within the pancreatic islet, as has been well described by a bunch of folks.

Speaker Change: As we have more patients with longer term follow up.

Speaker Change: Now moving to your third question on <unk>.

Speaker Change: Obesity candidate.

Speaker Change: And its similarities versus differences for type two diabetes.

Speaker Change: What we have stated before.

Before is that the <unk> 001 candidate for type two diabetes has the human insulin promoter driving the human <unk> sequence the human <unk> peptide.

Speaker Change: Peptide has a very short half life in the circulation and its actions on blood sugar or local within the pancreatic islet as has been well described by a bunch of folks so theres an opportunity to nominate a candidate for type two diabetes that has high local activity and limited <unk>.

Dr. Harith Rajagopalan: So there's an opportunity to nominate a candidate for type 2 diabetes that has high local activity and limited systemic bioavailability in order to be able to improve blood sugar. And we're excited about data that we presented earlier this year that showed that a short half-life GLP-1 candidate can lower blood sugar in the DBDB mouse model very impressively. And that led us to our..., type 2 diabetes cancer

Speaker Change: <unk> bio availability in order to be able to improve blood sugar.

Speaker Change: <unk>.

Speaker Change: We're excited about data that we presented earlier this year that showed that a short half life <unk> candidate can lower blood sugar in the <unk> mouse model very impressively and Thats led us to our tight.

Speaker Change: Type two diabetes candidate.

Dr. Harith Rajagopalan: We anticipate that an obesity candidate would want to get serum levels that are higher than what would be required for a type 2 diabetes candidate. And so we will be looking to nominate a candidate that's optimized for weight loss in the REJUVA-002. We anticipate continuing to leverage the platform capabilities and learnings from REJUVA-1 in the sense that we will be delivering it. We anticipate delivering it in the same way We anticipate using the same type of viral vectors to deliver them; the same plasmid backbones that would apply to one would apply to the other.

Speaker Change: We anticipate that an obesity candidate would want to get serum levels that are higher than what would be required for type two diabetes candidate and so we will be looking to nominate a candidate that's optimized for weight loss in the <unk>.

Speaker Change: Anticipate continuing to leverage the platform capabilities and learnings from renewable one in the sense that we will be delivering we anticipate delivering it in the same way we anticipate using the same type of viral vectors to deliver them. The same plasma backbones that would apply to one would apply to the other but the.

Dr. Harith Rajagopalan: But the transgene sequences themselves may enable more optionality. We're also keenly interested, as we think about the evolution of this platform, not a question that you asked, but we're keenly interested in multiple concurrent mechanisms of metabolic impact, such as the use of GIP and GLP-1 to get agonism together, or other combinations that you can readily imagine, in order to achieve differentiated therapeutic impact, either in terms of efficacy or in terms of safety profiles.

Speaker Change: Trends gene sequences themselves may enable.

Speaker Change: More optionality. We're also keenly interested as we think about the evolution of this platform not a question that you asked but we are keenly interested in multiple concurrent mechanisms of metabolic impact such as the use of <unk> to get agonism together or other combinations that you can.

Speaker Change: Readily imagine in order to achieve differentiated therapeutic impact either in terms of efficacy or in terms of safety profiles and that will be up.

Dr. Harith Rajagopalan: And there will be a lot of opportunity for exploration as we advance the program. Thanks very much for your question. Thanks so much.

Speaker Change: A lot of opportunity for exploration as we advance the program.

Speaker Change: Very much for your great. Thanks, so much.

Speaker Change: Alright, thanks, so much.

Speaker Change: Thank you.

Speaker Change: Our next question.

Operator: comes from the line of Mike DeFiore of Evercore.

Speaker Change: Comes from the line of Mike <unk> of Evercore.

Mikey Fiore: Hi guys, this is Mikey Fiore for OMER. Thanks for taking my question and congrats on all the progress. A few from me.

Mike: Hi, guys. This is might be fury and for whom are thanks for taking my question and congrats on all the progress a few from me one is on the remaining one trial.

Mikey Fiore: One is on the Remain One trial. The question is, how will you ensure compliance post-procedure in terms of having patients stick to a uniform, reduced calorie diet throughout the entire trial? And how will the stat plan handle dropouts? And then I have a follow-up.

Mike: The question is how will you ensure compliance post procedure in terms of <unk>.

Mike: Having patients stick to a uniform.

Mike: Reduced calorie diet throughout the entire trial.

Speaker Change: And how will the stat plan handle dropouts and then I have a follow up.

Dr. Harith Rajagopalan: Okay, great question. So the Remain-1 trial, just for those people who may not be familiar with it, is our pivotal study that just got IDE approval at the beginning of April, the end of March, the beginning of April, for weight maintenance. The plan will be to take people who are obese, not type 2 diabetic, who are GLP-1 drug naive, initiate terzepatide therapy, which is the active agent in ZepBound, the obesity drug, and then to gradually up-titrate them over a period of several weeks to a maximum tolerated dose and achieve 15% body weight loss.

Speaker Change: Okay. Great question. So the remain one trial just for those people who may not be familiar with it is our pivotal study that just got <unk> approval at the beginning of April end of March beginning of April for weight maintenance. The plan will be to take people who are obese not type two diabetic who are.

Speaker Change: GOP, one drug naive initiate towards appetite therapy, which is the active agent and the ZIP bound the obesity drug and then to up titrate them over a period of several weeks to a maximum tolerated dose and achieving 15% body weight loss at that time, we're going to discontinue that.

Dr. Harith Rajagopalan: At that time, we're going to discontinue the terzepatide, and then we are going to randomize them to Revita treatment or a sham, and everyone is going to get, from the initiation of the study all the way through to follow-up, a recommendation for a diet that matches diets that have been used in similar studies of GLP-1 drugs for weight loss. So the idea is to really try to mimic the same kind of nutritional advice that they have gotten from other studies that have been targeting a similar patient population.

Speaker Change: Tours appetite and then we're going to randomize them to reveal the treatment or sham and everyone is going to get from the initiation of the study all the way through to follow up.

Speaker Change: A recommendation for a diet that matches diet that had been used in.

Speaker Change: Similar studies of <unk> drugs for weight loss. So the idea is to really try to mimic the same kind of nutritional advice that they have gotten from other studies.

Speaker Change: That have been targeting a similar patient population and we're going to have visibility into their ability to comply with dietary recommendations during that open label run in phase and I think that our expectation is that several months of adherence to that during the open label Phase will then translate to adherence during the follow up.

Dr. Harith Rajagopalan: And we're gonna have visibility into their ability to comply with dietary recommendations during that open-label run-in phase, and I think that our expectation is that several months of adherence to that during the open-label phase will then translate to adherence during follow-up. You had a great question about the stat plan on dropout. We do think that if we have a therapy that is really effective, as we expect that we will, then people who are in the control arm may be more likely to drop out than the people who are in the treatment arm.

Speaker Change: You had a great question about the stat plan on drop out.

Speaker Change: We do think that if.

Speaker Change: We have a.

Speaker Change: A therapy that is really effective as we expect that we will then people who are in the control arm may be more likely to drop out the people who are in the treatment arm and as a result, we have made a decision to seek a primary endpoint at 24 weeks rather than at 48 weeks.

Dr. Harith Rajagopalan: And as a result, we have made a decision to seek a primary endpoint at 24 weeks rather than at 48 weeks. And we are considering whether to offer Revita to those patients who are in the control arm and did not get the treatment as a crossover in order to help keep them in the study. But I will note that there are a lot of studies of withdrawal that have followed patients now from drug GLP-1 withdrawal that have followed patients for one year and have been able to keep patients in that study for that length of time. And so we're encouraged by that background. Yet another question.

Speaker Change: And we are considering whether to offer <unk> to those patients who.

Speaker Change: Do not get the treatment as a crossover in order to help keep them in the study, but I will note that there is a lot of studies of withdrawal that I followed patients now from of drug GOP. One withdrawal that are followed patients for one year and had been able to keep patients in that study for that length of time and so we're encouraged by that background.

Speaker Change: <unk>.

Speaker Change: You had another question Mike.

Mikey Fiore: Yeah, but before I move on, just to clarify what you said about the remain study, will the dropouts be centered altogether, or will it be like a last observation carried forward type of analysis? Good question.

Speaker Change: But before I move on just to clarify what you said about the review.

Speaker Change: The remains study will the dropouts be centered altogether or will it be like a last observation carried forward type of analysis for good question, we have not yet.

Dr. Harith Rajagopalan: We have not yet, although we have a view on what that should be. We have not yet reviewed that with the FDA, so I think it's premature to answer that. I would say that there is, the last observation carried forward is no longer the preferred statistical technique, and there are imputation techniques that tend to be preferred in this situation, but exactly how to do that will require a dialogue with the FDA that we are not yet ready to chat about. And just a simple question on Rejuva. 001.

Speaker Change: Have a view on what that should be we have not yet reviewed that with the FDA. So I think it's premature to answer that I.

Speaker Change: I would say that there is last observation carried forward is no longer the preferred statistical technique and there are imputation techniques that tend to be preferred in this situation, but exactly how to do that will require a dialogue with the FDA that we have not not yet ready to chat about.

Speaker Change: Got it got it and just a simple question on <unk>.

Speaker Change: So is there a one.

Mikey Fiore: Obviously, you switch to the fully humanized ULP1 promoter versus the last year you had the GLP-1 analog in your prototype. I think in the prototype, the beta cell transduction was around 30%. I was curious to see if the transduction percentage with this humanized GLP-1 promoter is in the same ballpark, or if it differs in any way.

Speaker Change: Obviously, you switched to the fully humanized <unk> one.

Speaker Change: Promoter.

Speaker Change: Versus the last year you had the.

Speaker Change: GOP one analog in your prototype I think in the prototype.

Speaker Change: Beta cell transduction was around 30% was curious to see if that.

Speaker Change: Transduction percentage with this humanized <unk> promoter in the same ballpark or.

Speaker Change: And if it differs in any way.

Dr. Harith Rajagopalan: Great question! The transgene sequence itself might differ, but the AAV9 that delivers it remains the same. And we have seen levels of transduction that are very comparable between the candidate and the surrogates that we used beforehand. And so part of the dose-bridging strategy, as we get ready for a human, we'll need to be able to demonstrate all of this with the candidate in preclinical models, and when we get closer, we will walk through those data with you in order to share how we're thinking about dose-bridging when we get to people

Speaker Change: Great question.

Speaker Change: <unk>.

Speaker Change: The transient sequence itself might differ but the.

Speaker Change: The.

Speaker Change: But the AAV nine that deliver as it.

Speaker Change: It remains the same and we have seen levels of transduction that are very comparable between that candidate and the surrogates that we used to beforehand.

Speaker Change: And so.

Speaker Change: Part of the dose bridging strategy as we get ready for a human will need to be able to.

Speaker Change: Demonstrate all of this with the candidate in preclinical models in order and we will and when we get closer we will walk through those data with you in order to share how we're thinking about dose bridging when we get to people.

Mikey Fiore: Okay. Very helpful. Thanks so much.

Speaker Change: Okay very helpful. Thanks, so much thanks, Mike appreciate it.

Dr. Harith Rajagopalan: Very helpful. Thanks so much. Thanks, Mike. I appreciate it.

Thank you.

Speaker Change: Our next question.

Operator: comes from the line of Michael of Morgan Stanley.

Speaker Change: Comes from the line of Michael's up Morgan Stanley.

Michael: Good afternoon. Thanks for taking the time to answer the question. Maybe just to follow up on the remaining one study. Looks like you guys are on track to start that fairly soon. Just curious if there's any remaining steps there to getting that study going. And then maybe secondly, you mentioned sort of providing some early looks at that data set as it starts to move forward, thoughts on potential timing there and maybe some types of data that might be shared in the sort of interim updates. Thanks. Yeah.

Michael: Thanks for taking the question maybe.

Michael: Maybe just a follow up on remain one study it looks like you guys are on track to start that fairly soon just curious if there's.

Michael: Any remaining steps there to getting that study going.

Speaker Change: And then maybe secondly.

Michael: Yeah, great. Thanks, Mike.

Speaker Change: You mentioned sort of providing some early looks at that data set as it says it starts to move forward.

Speaker Change: What's on potential timing, there and maybe some types of data that might be shared in the sort of interim updates. Thanks.

Dr. Harith Rajagopalan: Great to hear from you. We're super excited about the Remain One study. And now that we have an IDE approval, we've been able to talk to investigators and to sites about it, and we are incredibly encouraged by the feedback that we are getting about this trial and physicians' perception of its attractiveness to patients. So, what needs to happen in order to get us out of this standard stuff, you know, site selection, IRB approval, etc.

Speaker Change: Yeah, great. Thanks, Mike.

Speaker Change: Great to hear from you.

Speaker Change: We're super excited about the remain one study and now that we have an IDE approval, we've been able to talk to investigators and sites about it and we are incredibly encouraged by the feedback that we're getting about.

Speaker Change: This trial in the physician's perception of its attractiveness to patients so what needs to happen.

Dr. Harith Rajagopalan: We are able to leverage the fact that we have active clinical trial sites from Revitalize One, where we have good relationships with physicians and built clinical trial networks that we intend to leverage in order to help us accelerate and remain, and so we are enthusiastic about being able to leverage a lot of our existing infrastructure, which we've worked so hard to build. With respect to data updates, as you know, there will be an open-label cohort that we call Reveal One, and Reveal One patients can be treated in exactly the same way as Remain, with one exception.

Speaker Change: To get a sort of a standard stuff site selection IRB approval et cetera, where we.

We're able to leverage the fact that we have active clinical trial sites from revitalized one where we have good relationships with physicians and built clinical trial networks that we intend to leverage in order to help us accelerate remain and so we are enthusiastic about being able to leverage a lot of our existing infrastructure, which we've worked so hard to build.

Speaker Change: With respect to data updates as you know there will be an open label cohort that we call reveal one and the reveal one cohort patients can be treated in exactly the same way as remain.

Speaker Change: With one exception, we will allow patients to come into reveal who have already been on or are currently on a <unk> drug.

Dr. Harith Rajagopalan: We will allow patients to come into Reveal who have already been on or are currently on a GLP-1 drug and wish to discontinue it in order to be able to see if they can maintain weight loss and not have to stay on the drug. You may or may not have seen, just today, a tracking poll from the Kaiser Family Foundation came out talking about how nearly 50% of the people who are taking GLP-1s are concerned about the costs of ongoing GLP-1 therapy as one reason why people may be looking to stop.

Speaker Change: And wished to discontinue it in order to be able to.

Speaker Change: See if they can maintain weight loss and not have to stay on drug you may or may not have seen just today some.

Speaker Change: Tracking pull from the Kaiser family Foundation came out talking about how nearly 50% of the people who are taking GOP ones are concerned about the costs of ongoing GOP. One therapy is one reason why people may be looking to stop another reason as you know that I know, we think that the FDA is really interested in is patients who achieved <unk>.

Dr. Harith Rajagopalan: Another reason, as you know, that we think that the FDA is really interested in is patients who achieve weight loss benefits but are having tolerability issues with GLP-1. And so the Reveal-1 cohort's gonna allow us to look at those people, also in drug-naive people, will be treated in exactly the same way as in Remain. So our plan is to give you study updates starting in the fourth quarter. We'll get earlier efficacy data in the cohort who are already on GLP-1 because they won't need to be titrated up on the therapy, and then we'll get, it'll take us longer to get study efficacy or effectiveness updates in the Reveal-1 cohort.

Speaker Change: Loss benefit, but having tolerability issues with <unk> and so the reveal one cohort is going to allow us to look at those people and.

Speaker Change: Also in drug nave people.

Speaker Change: Who will be treated in exactly the same way as it remain so our plan is to give you a study update starting in the fourth quarter, we will get earlier efficacy data in the cohort who are already on a GOP one because they won't need to be titrated up on the therapy and then we will get it will take us longer to get study efficacy or.

Speaker Change: <unk> updates in the reveal one cohort.

Dr. Harith Rajagopalan: But nonetheless, we think together it's going to paint a picture for us of what we think the Remain-1 study might look like, but also what are the motivating drivers that patients might have to select Revita for this type of opportunity and may inform how we would pursue commercialization. And as the year progresses, we're going to give you ongoing updates on what we're seeing in Reveal and what kind of data you're going to get and when.

Speaker Change: But nonetheless, we think together, it's going to paint a picture for us for what we think both the remain one study might look like but also what are the motivating drivers that patients might have to select <unk> for this type of an opportunity and may inform how we would pursue the commercialization.

Michael: Got it. That's helpful. Thank you.

Speaker Change: And as the year progresses, we're going to give you ongoing updates on what we're seeing in reveal and what kind of data you're going to get and when.

Speaker Change: Got it that's helpful. Thank you.

Operator: Thank you. I would now like to turn the conference back to Dr. Raja Gopalan for closing remarks.

Dr. Raj: Thank you I would now like to turn the conference back to Dr. Raj <unk> for closing remarks, Sir.

Dr. Harith Rajagopalan: Thank you very much. I appreciate all of your time and attention this afternoon.

Dr. Raj: Thank you very much I appreciate all of your time and attention. This afternoon I Hope you can see we're firing on all cylinders here working on <unk> for both type two diabetes and for weight maintenance rejuvenesce heading towards a first in human while we are excited about is if you fast forward over the period of say one year.

Dr. Harith Rajagopalan: As I hope you can see, we're firing on all cylinders here, working on Revita for both type 2 diabetes and for weight maintenance, Rejuva heading towards a first in human. What we are excited about is if you fast forward over the period of, say, one year from now, what types of conversations might we be having if we have revitalized one data from our type 2 diabetes program in Revita, and if we have some open label data on weight maintenance after GLP-1 discontinuation from Reveal, and IND enablement heading to a first in human for Rejuva, we could be having a conversation that is vastly different than the one we are having now about what the future of type 2 diabetes and obesity might look like with disease modifying options on the horizon.

Dr. Raj: From now what types of conversations might we be having if we have revitalized one data from our type two diabetes program in <unk>.

Dr. Raj: If we have some open label data on weight maintenance after GOP, one discontinuation from reveal and <unk> enablement heading to a first in human for rejuvenation, we could be having a conversation that is vastly different than the one we are having now about what the future of type two diabetes and obesity might look like.

With disease modifying options on the horizon, we're excited about what that could mean for patients first and foremost and we are motivated by the desire to accelerate that path to that future as rapidly as we possibly can so appreciate everyone's attention today and look forward to following up.

Dr. Harith Rajagopalan: We're excited about what that could mean for patients, first and foremost, and we are motivated by the desire to accelerate that path to that future as rapidly as we possibly can. So, I appreciate everyone's attention today and look forward to following up.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

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