Q2 2024 Fractyl Health Inc Earnings Call & Business Update

August 14, 2024

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Good afternoon and welcome to Fractyl Health's second quarter financial results and business updates call.

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Good afternoon and welcome to Fractyl Health's second 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.

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.

I will now turn the call over to Stephen Jasper.

Stephen, you may now begin.

Thank you.

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.

Speaker Change: Thank you. This afternoon we issued a press release that outlines the topics we plan to discuss today. This release is available at www.fractal.com under the investors tab.

Speaker Change: Joining us on the call today are Dr. Harith Rajagopalan, Chief Executive Officer, and Lisa Davidson, Chief Financial Officer.

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 milestone, preclinical or clinical trial data.

Speaker Change: The impact of any of our product candidates, the design initiation, timing, and results of clinical enrollment in any clinical trial or readout, The potential launch or commercialization of any of our product candidates or products, 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 Act of 1995. Such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act.

Speaker Change: pre-clinical or clinical trial data, the design initiation, timing, and results of clinical enrollment in any clinical trial or readouts,

Speaker Change: The potential launch or commercialization of any of our product candidates or products

Speaker Change: The sufficiency of our cash, cash equivalents, and investments to fund our operating activities for any specific period of time should be considered overlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

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

Speaker Change: 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 filed with the Securities and Exchange Commission on August 14, 2024, and the company's other filings with the SEC.

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

Speaker Change: Participants are directed to the risk factors set forth in Fractal's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2024, and the company's other filings with the SEC.

Speaker Change: Any forward-looking statements made today speak only to Fractyl's operations as of today.

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

Speaker Change: Fractyl disclaims any duty to provide updates to its overlooking statements even if subsequent events cut the company's views to change.

Speaker Change: Fractyl disclaims any duty to provide even if subsequent events cut the company's views to change.

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

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

Speaker Change: Thank you, Stephen, and good afternoon, everyone.

Maria: Thank you, Stephen, and good afternoon everyone. Thank you for joining us on today's call. I'm proud of the progress we've made in the past quarter at Fractyl Health as we continue to deliver on our promise to develop transformative therapies that can prevent and reverse metabolic disease.

Maria: Thank you for joining us on today's call.

Maria: I'm proud of the progress we've made in the past quarter at Fractyl Health as we continue to deliver on our promise to develop transformative therapies that can prevent and reverse metabolic disease.

Speaker Change: Several recent achievements underscore the potential of our platform. In the past quarter, we have seen the FDA has awarded Revita a breakthrough device designation for weight maintenance after GLP-1 drug discontinuation.

Speaker Change: Several recent achievements underscore the potential of our plastic.

Speaker Change: In the past quarter, we have seen the FDA has awarded Revita a breakthrough device designation for weight maintenance after GLP-1 drug discontinuation. We've also seen Rovita's real-world registry in Germany, having demonstrated through one year of follow-up in an initial cohort, substantial and sustained weight loss and blood sugar control in patients living with obesity and type 2 diabetes.

Speaker Change: We've also seen Rovita's real-world registry in Germany, having demonstrated through one year of follow-up in an initial cohort, substantial and sustained weight loss and blood sugar control in patients living with obesity and type 2 diabetes.

Speaker Change: We have had a significant expansion of our Revitalize One pivotal study protocol and potential patient population for Revita for glucose control in type 2 diabetes, and an award-winning data presentation of our REJUVA gene therapy platform at the American Diabetes Association, which I will discuss later.

Speaker Change: We have had a significant expansion of our Revitalize One pivotal study protocol and potential patient population for Revita for glucose control in type 2 diabetes.

Operator: Good afternoon and welcome to Fractyl Health's second 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.

Speaker Change: and an award-winning data presentation of our REJUVA gene therapy platform at the American Diabetes Association, which I will discuss later.

Speaker Change: At the same time, we are disappointed in the disconnect between our substantial progress over the last several quarters and our share price.

Operator: There will be a Q&A session of following management prepared remarks.

Speaker Change: Considering the challenging financial circumstances in the market, we are committed to managing our business with financial discipline, a heightened sense of urgency, and a keen focus on operational execution.

Operator: I will now turn the call over to Stephen Jasper. Stephen, you may now begin. Thank you.

Stephen Jasper: This afternoon, we issued a press release that outlines the topics we planned to discuss today. This release is available at www.fractyl.com under the Investors tab. Joining us on the call today are Dr. Careet, Roger Gopalan, Chief Executive Officer, and Lisa Davidson, Chief Financial Officer.

Speaker Change: We value the support and feedback from our shareholders and would be happy to engage further to discuss our strategy and process.

Speaker Change: We value the support and feedback from our shareholders and would be happy to engage further to discuss our strategy and prospects.

Speaker Change: The management team and I are incredibly optimistic about the near-term prospects for the company, and based on our track record and significant progress made since going public in February, we are confident in our ability to execute upon major upcoming value drivers over the next few quarters, which I am excited to walk through today on our call.

Speaker Change: The management team and I are incredibly optimistic about the near-term prospects for the company and, based on our track record and significant progress made since going public in February , we are confident in our ability to execute upon major upcoming value drivers over the next few quarters, which I am excited to walk through today on our call.

Stephen 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 facts, including statements about our objectives and anticipated clinical milestone, preclinical or clinical trial data, the impact of any of our product candidates, the design initiation, timing and results of clinical enrollment in any clinical trial or readouts, the potential launch or commercialization of any of our product candidates or products, 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 security litigation reform act of 1995. Such forward looking statements are intended to be subject to the safe harbor protection provided by the reform act. Actual results can differ materially from those indicated by the forward looking statements due to the impact of risk, uncertainties, and other important factors.

Speaker Change: As we advance our two platforms, Revita and Rejuva, we see an opportunity to truly bring an end to obesity by developing and delivering disease-modifying therapies that offer scalable, sustained solutions to the disease.

Speaker Change: We are laser-focused on achieving key upcoming data milestones across both programs that will de-risk our clinical, regulatory, and commercial opportunity, beginning with Revita.

Speaker Change: We are laser focused on achieving key upcoming data milestones across both programs that will de-risk our clinical regulatory and commercial opportunity.

Speaker Change: 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.

Speaker Change: Beginning with Revita.

Speaker Change: You can think of it as LASIK, but for obese...

Speaker Change: You can think of it as LASIC, but for obesity.

Speaker Change: Revita is on a path towards pivotal data in two very large markets with extraordinary unmet need. The first is weight maintenance after discontinuation of GLP-1-based drugs in obesity. And the second target market is glucose control for people with type 2 diabetes who do not want to escalate medical therapy.

Stephen Jasper: Participants are directed to the risk factors set forth in fractals quarterly report on form 10Q filed with the Securities and Exchange Commission on August 14, 2024, and the company's other filings with the SEC. Any forward looking statements made today speak only to fractals operations as of today, fractal disclaims any duty to provide updates to its forward looking statements, even if subsequent events cut the company's views to change.

Speaker Change: And the second target market is glucose control for people with type 2 diabetes who do not want to escalate medical therapy.

Speaker Change: Obesity is the single most significant opportunity in health care today. We know GLP-1 drugs have been shown in large clinical trials to be very effective in helping patients achieve weight loss and other cardiometabolic benefits.

Speaker Change: However, there is considerable debate about how to quantify the true impact these drugs will have on health care outcomes in the real world.

Harry: It is now my pleasure to pass the call over to her. Thank you, Stephen, and good afternoon, everyone. Thank you for joining us on today's call.

Speaker Change: However, there is considerable debate about how to quantify the true impact these drugs will have on healthcare outcomes in the real world.

Speaker Change: Why is that?

Harry: I'm proud of the progress we've made in the past quarter at fractal health as we continue to deliver on our promise to develop transformative therapies that can prevent and reverse metabolic disease. Several recent achievements underscore the potential of our platform. In the past quarter, we have seen the FDA has awarded Reveeda a breakthrough device designation for wake maintenance after GLP1 drug discontinuation. We've also seen Reveeda's real-world registry in Germany having demonstrated through one year of follow-up in an initial cohort, substantial and sustained weight loss and blood sugar control in patients living with obesity and type 2 diabetes.

Speaker Change: Higher rates of GLP-1 discontinuation have been reported by multiple groups and are now, in fact, already old news.

Speaker Change: Why is that? High rates of GLP-1 discontinuation have been reported by multiple groups and are now, in fact, already old news.

Speaker Change: According to IQVIA data, Wegovy had adherence rates of roughly only 41% over a 12-month period, and a recent Blue Cross Blue Shield report suggests that a growing number of patients are not staying on drugs past three months of initial use.

Speaker Change: Some have suggested that patients who stop taking one obesity drug will simply switch to another drug for long-term maintenance.

Speaker Change: But more recent data do not support that theory.

Speaker Change: A report from Truveta just last month was the first publication to look at GLP-1 reinitiation within one year of stopping a prior GLP-1. The group studied nearly 100,000 individuals who initiated a GLP-1 drug between 2018 and 2023 and found that two-thirds of patients stopped taking their GLP-1 for obesity within one year, consistent with earlier reports.

Speaker Change: but more recent data do not support that theory.

Harry: We have had a significant expansion of our revitalized one pivotal study protocol and potential patient population for Reveeda for glucose control in type 2 diabetes and an award-winning data presentation of our Rajuva Gene Therapy platform at the American Diabetes Association, which I will discuss later. Center.

Speaker Change: A report from Truveta just last month was the first publication to look at GLP-1 re-initiation within one year of stopping a prior GLP-1.

Speaker Change: The group studied nearly 100,000 individuals who initiated a GLP-1 drug between 2018 and 2023 and found that two-thirds of patients stopped taking their GLP-1 for obesity within one year, consistent with earlier reports.

Harry: At the same time, we are disappointed in the disconnect between our substantial progress over the last several quarters and our share price. Considering the challenging financial circumstances in the market, we are committed to managing our business with financial discipline, a heightened sense of urgency, and a keen focus on operational execution. We value the support and feedback from our shareholders and would be happy to engage further to discuss our strategy and prospects.

Speaker Change: What's new is that they found that only one-third of those individuals who stop taking one drug try another drug within one year.

Speaker Change: This implies that there's a very high rate of GLP-1 experimentation in the market today, but also that the majority of patients who stop taking the drug do not start another drug within one year at least, and therefore are not going to benefit from the drugs that are available long enough to see the benefits that the clinical trials are showing.

Speaker Change: This implies that there's a very high rate of GLP-1 experimentation in the market today.

Speaker Change: but also that the majority of patients who stop taking the drug do not start another drug within one year at least.

Harry: The management team and I are incredibly optimistic about the near-term prospects for the company, and based on our track record and significant progress made since going public in February, we are confident in our ability to execute upon major upcoming value drivers over the next few quarters, which I am excited to walk through today on our call. As we advance our two platforms, Revita and Rijuba, we see an opportunity to truly bring an end to obesity by developing and delivering disease-modifying therapies that offer scalable, sustained solutions to the disease.

Speaker Change: and, therefore, are not going to benefit from the drugs that are available long enough to see the benefits that the clinical trials are showing. What's more, there are a large number of individuals who have not yet tried a GLP-1 drug.

Speaker Change: What's more, there are a large number of individuals who have not yet tried a GLP-1 drug.

Speaker Change: Broad payer reimbursement has become a key hurdle to unlocking access, and it is clear that expanded coverage will depend on real-world results to demonstrate durable weight loss maintenance, the kind of results that we believe RoVita can offer.

Speaker Change: So, it's becoming clear that chronic administration burden of GLP-1s, combined with potential side effects, high costs, and distribution issues, has resulted in truly abysmal long-term adherence.

Harry: We are laser-focused on achieving key upcoming data milestones across both programs that will de-risk our clinical, regulatory, and commercial opportunity. Beginning with Revita, our Revita platform is a proprietary device and delivery system that targets the duodenum to reverse pathology and the duodenal lining that is a root cause of obesity and type 2 diabetes. You can think of it as Lasick, but for obesity. Revita is on a path towards pivotal data in two very large markets with extraordinary unmet need. The first is weight maintenance after discontinuation of GLP1-based drugs in obesity, and the second target market is glucose control for people with type 2 diabetes who do not want to escalate medical therapy.

Speaker Change: The obesity market is in a situation where, having now substantially solved the problem of short-term weight loss, the incredible unmet need in obesity has shifted to the problem of durable weight maintenance.

Speaker Change: What is so desperately needed for patients is a reliable and effective off-ramp from GLP-1 drug therapy.

Speaker Change: However, innovation in this space by other competitors cannot solve the problem of adherence and has rather therefore focused on a zero-sum game of superiority to existing drugs.

Speaker Change: All these alternatives are competing against each other for only one piece of the puzzle, which comprises the minority of patients who are willing to comply with a lifelong chronic drug regimen.

Speaker Change: All these alternatives are competing against each other for only one piece of the puzzle which comprises the minority of patients we're willing to comply with the lifelong chronic drug regimen.

Harry: Obesity is the single most significant opportunity in healthcare today. We know GLP1 drugs have been shown in large clinical trials to be very effective in helping patients achieve weight loss and other cardiometabolic benefits. However, there is considerable debate about how to quantify the true impact these drugs will have on healthcare outcomes in the real world. Why is that? High rates of GLP1 discontinuation have been reported by multiple groups and are now, in fact, already old news.

Speaker Change: It is clear that major players are beginning to pay very close attention to the issues around weight maintenance and the limitations of the drug product form in the treatment of obesity.

Speaker Change: We were incredibly proud to share that earlier this month the FDA recently granted breakthrough device designation for our Rovita system for use in maintaining weight loss after discontinuing GLP-1 drugs. Breakthrough device designation allows for acceleration of development, assessment, and FDA review for premarket approval.

Speaker Change: Breakthrough device designation allows for acceleration of development, assessment, and FDA review for pre-market approval. We and our scientific advisors believe that this is a momentous event in the field of obesity management.

Speaker Change: We and our scientific advisors believe that this is a momentous event in the field of obesity management because, to our knowledge, Revita is the first and only device developed for obesity to receive breakthrough device designation.

Harry: According to IQVIA data, we gov had adherence rates of roughly only 41% over a 12-month period, and a recent Blue Cross Blue Shield report suggests that a growing number of patients are not staying on drug past three months of initial use. Some have suggested that patients who stop taking one obesity drug will simply switch to another drug for long-term maintenance, but more recent data do not support that theory. A report from Truveta just last month was the first publication to look at GLP1 re-initiation within one year of stopping a prior GLP1.

Speaker Change: Because, to our knowledge, Revita is the first and only device developed for obesity to receive breakthrough device designation.

Speaker Change: The FDA has clearly specified that weight maintenance is defined as the achievement and maintenance of clinically meaningful weight loss for one year after the discontinuation of therapy.

Speaker Change: And despite the development of a range of products for obesity, ranging from peptides to small molecules to antibodies to even siRNA approaches, we are unaware of any other products in development that can come anywhere close to maintaining metabolic benefits for one year after discontinuation.

Speaker Change: And despite the development of a range of products for obesity, ranging from peptides, to small molecules, to antibodies, to even siRNA approaches,

Speaker Change: We are unaware of any other products in development that can come anywhere close to maintaining metabolic benefits for one year after discontinuation.

Harry: The group studied nearly 100,000 individuals who initiated a GLP1 drug between 2018 and 2023, and found that two-thirds of patients stopped taking their GLP1 for obesity within one year consistent with earlier reports. What's new is that they found that only one third of those individuals who stop taking one drug try another drug within one year. This implies that there's a very high rate of GLP1 experimentation in the market today but also that the majority of patients who stop taking the drug do not start another drug within one year at least and therefore are not going to benefit from the drugs that are available long enough to see the benefits that the clinical trials are showing.

Speaker Change: Our confidence in Ravita is validated by what we're seeing in our real-world registry study in Germany, which continues to show impressive clinical results in the first tranche of patients who have achieved one year of follow-up.

Speaker Change: Our confidence in Revita is validated by what we're seeing in our real-world registry study in Germany, which continues to show impressive clinical results in the first tranche of patients who have achieved one year of follow-up.

Speaker Change: At baseline, prior to Ravita, these 11 patients at a median age of 62 years, median body weight of 111 kilograms, and advanced type 2 diabetes with an average of 15 years since diagnosis of diabetes. Despite using up to three different glucose-lowering medications, patients' type 2 diabetes remained uncontrolled prior to intervention with a median baseline HbA1c of 9.6%, which is quite high.

Speaker Change: At baseline, prior to Revita, these 11 patients had a median age of 62 years, median body weight of 111 kilograms, and advanced type 2 diabetes with an average of 15 years since diagnosis of diabetes.

Speaker Change: Despite using up to three different type 2 diabetes remained uncontrolled prior to intervention with a median baseline HbA1c of 9.6%, which is quite high.

Speaker Change: As in prior studies of Revita, a majority of those who enrolled in the study have been men.

Harry: What's more, there are a large number of individuals who have not yet tried the GLP1 drug. Fraud payer reimbursement has become a key hurdle to unlocking access and it is clear that expanded coverage will depend on real world results to demonstrate durable weight loss maintenance. The kind of results that we believe Ruby that can offer. So it's becoming clear that chronic administration of GLP1 combined with potential side effects, high costs and distribution issues has resulted in truly abysmal long term adherence.

Speaker Change: As in prior studies of Revita, a majority of those who enrolled in the study have been men.

Speaker Change: These factors, advanced age, advanced type 2 diabetes, predominantly male gender, have all typically been associated with reduced efficacy of drugs to lower weight and blood sugar. And despite the fact that these individuals represent a hard-to-treat patient segment, at 12 months post-Revita, median weight decreased from 111 kilograms to 97 kilograms, representing nearly 13 percent total body weight loss.

Speaker Change: These factors—advanced age, advanced type 2 diabetes, predominantly male gender—have all typically been associated with reduced efficacy of drugs to lower weight and blood sugar.

Speaker Change: And despite the fact that these individuals represent a hard-to-treat patient segment, at 12 months post-Revita, median weight decreased from 111 kilograms

Speaker Change: And median HbA1c decreased from 9.6 percent to 7.2 percent, which is a substantial improvement in blood sugar control in individuals who had truly poorly controlled disease.

Speaker Change: to 97 kilograms, representing nearly 13% total body weight loss.

Harry: The obesity market is in a situation where having now substantially solved the problem of short term weight loss, the incredible unmet need in obesity has shifted to the problem of durable weight maintenance. What is so differently needed for patients is a reliable and effective off ramp from GLP1 drug therapy. However, innovation in the space by other competitors cannot solve the problem of adherence and is rather therefore focused on a zero sum game of superiority to existing drugs.

Speaker Change: and median HbA1c decreased from 9.6% to 7.2%, which is a substantial improvement in blood sugar control in individuals who had truly poorly controlled disease.

Speaker Change: We will be presenting data in larger numbers of patients at a scientific meeting later this year. So data from this real-world registry, while relatively small numbers at one year so far, validate the results that we have seen from pooled analyses of over 100 Ravita clinical trial patients who had previously been followed for a year or more.

Speaker Change: We will be presenting data in larger numbers of patients at a scientific meeting later this year.

Speaker Change: So, data from this real-world registry, while relatively small numbers at one year so far, validate the results that we have seen from pooled analyses of over 100 Ravita clinical trial patients who had previously been followed for a year or more.

Harry: All these alternatives are competing against each other for only one piece of the puzzle which comprises the minority of patients who are willing to comply with a lifelong chronic drug regimen. It is clear that major players are beginning to pay very close attention to the issues around weight maintenance and the limitations of the drug product form in the treatment of obesity.

Speaker Change: The data from Germany are a promising indicator, therefore, for our weight maintenance remain one pivotal study, as well as our type 2 diabetes revitalize one pivotal study.

Speaker Change: We believe the German registry experience also provides important read-through for the potential on-label results Rovita may see in other regions, including the United States, if and when approved.

Harry: We were incredibly proud to share that earlier this month, the FDA recently granted breakthrough device designation for our Ruby to system for use and maintaining weight loss after discontinuing GLP1 drugs. Breakthrough device designation allows for acceleration of development, assessment and FDA review for pre-market approval. We and our scientific advisors believe that this is a momentous event in the field of obesity management because to our knowledge, Ruby is the first and only device developed for obesity to receive breakthrough device designation.

Speaker Change: What's more, we look ahead to the next several quarters in Germany where Revita has a CE-marked label to treat inadequately controlled type 2 diabetes despite the use of glucose-lowering medications, where we have enthusiastic investigators and patients who are now one year post-Revita leading lives that are generally healthier and less burdened by disease and disease management than before Revita.

Speaker Change: What's more, we look ahead to the next several quarters in Germany where Rovita has a CE mark label to treat inadequately controlled type 2 diabetes despite the use of glucose-lowering medications.

Speaker Change: where we have enthusiastic investigators and patients who are now one year post-rovita leading lives that are generally healthier and less burdened by disease and disease management than before rovita.

Speaker Change: Given the feedback from physicians and patients within the registry and these remarkable clinical results for patients who would rather live with poorly controlled type 2 diabetes than take another medication and are opting for Revita to improve their glucose control and to lower weight without needing more medicines, we are gratified to have a waiting list of hospitals and physicians throughout Germany who would like to begin offering Revita for their patients, and we anticipate offering Revita at additional centers in Germany over the course of the next several quarters and to turn attention from purely running a registry in the country to begin to inform and educate patients and physicians to see if Revita is right for them.

Harry: The FDA has clearly specified that weight maintenance is defined as the achievement and maintenance of clinically meaningful weight loss for one year after the discontinuation of therapy. And despite the development of a range of products for obesity ranging from peptides to small molecules to antibodies to even SIRNA approaches, we are unaware of any other products and development that can come anywhere close to maintaining metabolic benefits for one year after discontinuation. Our confidence in Ruby is validated by what we're seeing in our real world registry study in Germany, which continues to show impressive clinical results in the first tranche of patients who have achieved one year of follow-up.

Speaker Change: We are gratified to have a waiting list of hospitals and physicians throughout Germany who would like to begin offering Revita for their patients.

Speaker Change: And we anticipate offering Rovita at additional centers in Germany over the course of the next several quarters and to turn attention from purely running a registry in the country to begin to inform and educate patients and physicians to see if Rovita is right for them.

Speaker Change: As we've been ramping up our Remain One study for weight maintenance, our focus has been on leveraging centers of excellence with GI endoscopists who are already involved in our revitalized clinical program. In particular, we've developed strong relationships with GI endoscopists who have a specific area of interest in bariatric and metabolic endoscopy, given the critical role of the gut in controlling obesity and metabolic disease.

Speaker Change: As we've been ramping up our Remain One study for weight maintenance, our focus has been on leveraging centers of excellence with GI endoscopists.

Harry: At baseline, prior to Ruby, these 11 patients at a median age of 62 years, median body weight of 111 kilograms, and advanced type 2 diabetes with an average of 15 years since diagnosis of diabetes, disease. Despite using up to three different glucose lowering medications, patients type to diabetes remained uncontrolled prior to intervention with a median baseline HBA 1C of 9.6%, which is quite high. As in prior studies of Ravita, a majority of those who enrolled in the study have been men.

Speaker Change: who are already involved in our revitalized clinical program. In particular, we've developed strong relationships with GI endoscopists who have a specific area of interest in bariatric and metabolic endoscopy, given the critical role of the gut in controlling obesity and metabolic disease.

Speaker Change: Something we've been told time and again from doctors is that they have an overwhelming number of patients who are desperate to lose weight and to keep it off.

Speaker Change: Something we've been told time and again from doctors is that they have an overwhelming number of patients who are desperate to lose weight and to keep it off. And many bariatric and metabolic-focused endoscopists who we are recruiting for the clinical trials are already building obesity practices due to high demand for their services.

Speaker Change: And many bariatric and metabolic focus endoscopists who we are recruiting for the clinical trials are already building obesity practices due to high demand for their services. Many of them have a ready pool of patients who are potential Ravita candidates within their own GI groups, and a motivation to build these practices to offer additional therapies for a larger number of patients. These GI doctors also have deep relationships with primary care physicians who already refer patients to them, allowing for a natural referral network for patients to be identified and treated in endoscopy centers.

Harry: These factors, advanced age, advanced type to diabetes, predominantly male gender, have all typically been associated with reduced efficacy of drugs to lower weight and blood sugar. And despite the fact that these individuals represent a hard to treat patient segment, at 12 months post-Ravita median weight decrease from 111 kilograms to 97 kilograms, representing nearly 13% total body weight loss, and median HBA 1C decrease from 9.6% to 7.2%, which is a substantial improvement in blood sugar control in individuals who had truly poorly controlled disease.

Speaker Change: Many of them have a ready pool of patients who are potential Ravita candidates within their own GI groups and a motivation to build these practices to offer additional therapies for a larger number of patients.

Speaker Change: These GI doctors also have deep relationships with primary care physicians who already refer patients to them, allowing for a natural referral network for patients to be identified and treated in endoscopy centers.

Speaker Change: After speaking with these doctors, we are confident that our focus on these highly trained specialists will allow us to build a significant network of physicians who can easily introduce the approximately 40-minute Revita procedure seamlessly into their practice.

Harry: We will be presenting data in larger numbers of patients at a scientific meeting later this year. So, data from this real world registry, while relatively small numbers at one year so far, validate the results that we have seen from pooled analyses of over 100 Ravita clinical trial patients who had previously been followed for a year or more. The data from Germany are a promising indicator, therefore, for our weight maintenance remain one pivotal study, as well as our type to diabetes revitalize one pivotal study.

Speaker Change: Millions of patients with obesity and type 2 diabetes are already seeing gastroenterologists regularly and Millions of endoscopies are performed annually for people with obesity and type 2 diabetes, Of the estimated 20 million endoscopies that are performed each year in the United States, roughly 40 percent of people, or 8 million endoscopies, are already being performed annually for people with obesity in the U.S. So these patients are already coming to endoscopy, already getting procedures, and Revita is purpose-built to fit into this high-volume, highly scalable work.

Speaker Change: Millions of patients with obesity and type 2 diabetes are already seeing gastroenterologists regularly and millions of endoscopies are performed annually for people with obesity and type 2 diabetes.

Speaker Change: Of the estimated 20 million endoscopies that are performed each year in the United States, roughly 40% of people, or 8 million endoscopies, are already being performed annually for people with obesity in the U.S.

Speaker Change: So, these patients are already coming to endoscopy, already getting procedures, and Revita is purpose-built to fit into this high-volume, highly scalable workflow.

Harry: We believe the German registry experience also provides important read through for the potential on-label results Ravita may see in other regions, including the United States, if and when approved. What's more, we look ahead to the next several quarters in Germany where Ravita has a CE mark label to treat inadequately controlled type to diabetes despite the use of glucose lowering medications, where we have enthusiastic investigators and patients who are now one year post-Ravita leading lives that are generally healthier and less burdened by disease and disease management than before Ravita.

Speaker Change: What this allows is a targeted and efficient commercial model that would allow us to focus on bariatric and metabolic endoscopists to help build on their existing practices to offer Revita for potential indications that they cannot currently offer today.

Speaker Change: This is not the same approach as prescribing an oral or injectable agent for weight loss, but we do believe this is a highly attractive therapeutic alternative to the clearly very large segment of patients who are looking for a durable weight loss solution without being on chronic drug treatment.

Harry: Given the feedback from physicians and patients within the registry and these remarkable clinical results for patients who would rather live with poorly controlled type to diabetes than take another medication and are opting for Ravita to improve their glucose control and to lower weight without needing more medicines, we are gratified to have a waiting list of hospitals and physicians throughout Germany who would like to begin offering Ravita for their patients and we anticipate offering Ravita at additional centers in Germany over the course of the next several quarters and to turn a tenth from purely running a registry in the country to begin to inform and educate patients and physicians to see if Ravita is right for them. As we have been ramping up our remain one study for weight maintenance, our focus has been on leveraging centers of excellence with GI endoscopists who are already involved in our revitalized clinical program.

Speaker Change: We look forward to speaking more about our targeted and efficient commercial model and the path forward to that in future quarters.

Speaker Change: Back to Revita Clinical Development.

Speaker Change: As you'll remember, REMAIN-1 is our pivotal study for weight maintenance after GLP-1 drug discontinuation in obesity. Having obtained FDA IDE approval for this study at the end of Q1, we are pleased to report that we have now initiated the study and are actively enrolling at several centers in the United States.

Dr. Rivera: Back to Rovita Clinical Development.

Speaker Change: As you'll remember, Remain 1 is our pivotal study for weight maintenance after GLP-1 drug discontinuation in obesity.

Speaker Change: Having obtained FDA IDE approval for this study at the end of Q1, we are pleased to report that we have now initiated the study and are actively enrolling at several centers in the United States.

Speaker Change: We see incredible enthusiasm from physicians and patients as we begin to ramp up study enrollment, and we anticipate reporting a midpoint data analysis in the second quarter of 2025, which will evaluate approximately 45 patients who have been randomized and followed for 12 weeks post-treatment with Ruvita or sham.

Speaker Change: We see incredible enthusiasm from physicians and patients.

Speaker Change: as we begin to ramp up study enrollment, and we anticipate reporting a midpoint data analysis in the second quarter of 2025, which will evaluate approximately 45 patients who have been randomized and followed for 12 weeks post-treatment with Revita or Sham.

Speaker Change: These are patients who were not previously on trizepatide who will be achieving 15% total body weight loss, and then trizepatide will be discontinued and they will be randomized and then followed for 12.

Harry: In particular, we have developed strong relationships with GI endoscopists who have a specific area of interest in bariatric and metabolic endoscopy given the critical role of the gut in controlling obesity and metabolic disease, is. Something we've been told time and again from doctors is that they have an overwhelming number of patients who are desperate to lose weight and to keep it off. And many bariatric and metabolic focus endoscopies who we are recruiting for the clinical trials are already building obesity practices due to high demand for their services.

Speaker Change: These are patients who were not previously on Trezepatide who will be achieving 15% total body weight loss and then Trezepatide will be discontinued and they will be randomized and then followed for 12 weeks.

Speaker Change: In parallel, we are beginning to enroll patients in our Open Label Reveal-1 cohort for people who are already on a GLP-1 drug and looking for an off-ramp to keep the weight off after stopping these drugs.

Harry: Many of them have already pool of patients who are potential Rovedic candidates within their own GI groups and a motivation to build these practices to offer additional therapies for a larger number of patients. These GI doctors also have deep relationships with primary care physicians who already refer patients to them, allowing for a natural referral network for patients to be identified and treated in endoscopy centers. After speaking with these doctors, we are confident that our focus on these highly trained specialists will allow us to build a significant network of physicians who can easily introduce the approximately 40 minute Rovedic procedure seamlessly into their practice.

Speaker Change: In parallel, we are beginning to enroll patients in our Open Label Reveal 1 cohort for people who are already on a GLP1 drug and looking for an off-ramp to keep the weight off after stopping these drugs.

Speaker Change: We anticipate reporting early data from the Reveal-1 Open Label cohort in the fourth quarter of 2024.

Speaker Change: We anticipate reporting early data from the REVEAL-1 Open Label Cohort in the fourth quarter of 2024. Both REMAIN-1 and REVEAL-1 underscore our important commitment to this area of weight maintenance after GLP-1 discontinuation.

Speaker Change: Both Remain-1 and Reveal-1 underscore our important commitment to this area of weight maintenance after GLP-1 discontinuation.

Speaker Change: Turning toward Revita for type 2 diabetes.

Speaker Change: Our goal with Revitalize 1 is to establish Revita as a safe, effective, and straightforward treatment alternative to medication escalation for patients with type 2 diabetes. As we are beginning to see in Germany, we believe patients may choose this as early as second line or as an alternative to initiating injectables or insulin or escalating insulin therapy.

Speaker Change: Turning toward Ruvita for type 2

Speaker Change: Our goal with Revitalize One is to establish Revita as a safe, effective, and straightforward treatment alternative to medication escalation for patients with type 2 diabetes.

Speaker Change: As we are beginning to see in Germany, we believe patients may choose this as early as second line or as an alternative to initiating injectables or insulin or escalating insulin therapy.

Speaker Change: The common factor influencing patient behavior is a desire to have better disease control while avoiding medication escalation.

Harry: Millions of patients with obesity and type 2 diabetes are already seeing gastroenterologists regularly, and millions of endoscopies are performed annually for people with obesity and type 2 diabetes. Of the estimated 20 million endoscopies that are performed each year in the United States, roughly 40% of people with 8 million endoscopies are already being performed annually for people with obesity in the U.S. So these patients are already coming to endoscopy, already getting procedures, and Roveda is purpose built to fit into this high volume, highly scalable workflow.

Speaker Change: In June, we announced our plans to significantly expand our Revitalize 1 pivotal study of Rovita to include patients with type 2 diabetes who are inadequately controlled on any glucose-lowering agent, including GLP-1s and or insulin, thereby expanding our potential U.S. treatment population by about six-fold.

Speaker Change: In June , we announced our plans to significantly expand or revitalize one pivotal study of Rovita to include patients with type 2 diabetes who are inadequately controlled on any glucose lowering agent, including GLP-1s and or insulin, thereby expanding our potential U.S. treatment population by about sixfold.

Speaker Change: We continue to enroll the study and anticipate reporting top-line data in mid-2025.

Speaker Change: We continue to enroll this study and anticipate reporting top-line data in mid-2025.

Speaker Change: Finally, we wanted to turn to our nutrient responsive GLP1 gene therapy platform, REJUVA. We continue to generate preclinical data that excites the scientific and medical community for the potential game-changing nature of this platform. We have shared new head-to-head preclinical data comparing REJUVA to semaglutide, which demonstrated that treatment with REJUVA yielded robust and durable weight loss in mice with diet-induced obesity and also enabled sustained weight maintenance following semaglutide withdrawal. Importantly, mice treated with REJUVA demonstrated a greater relative proportion of loss of fat mass to lean mass than those treated with semaglutide, and this has been flagged, as you know, as a significant potential risk with currently approved GLP1 drugs.

Speaker Change: Finally, we wanted to turn to our nutrient responsive GLP-1 gene therapy platform, REJUVA.

Harry: What this allows is a targeted and efficient commercial model that would allow us to focus on bariatric and metabolic endoscopies to help build on their existing practices to offer Roveda for potential indications that they cannot currently offer today. This is not the same approach as prescribing an oral or injectable agent for weight loss, but we do believe this is a highly attractive therapeutic alternative to the clearly very large segment of patients who are looking for a durable weight loss solution without being on chronic drug therapy. We look forward to speaking more about our targeted and efficient commercial model and the path forward to that in future quarters.

Speaker Change: we continue to generate pre-clinical data that excites the scientific and medical community for the potential game-changing nature of this platform.

Speaker Change: We have shared new head-to-head preclinical data comparing rejuva to semaglutide, which demonstrated that treatment with rejuva yielded robust and durable weight loss in mice with diet-induced obesity, and also enabled sustained weight maintenance following semaglutide withdrawal.

Speaker Change: Importantly, mice treated with Rejuva demonstrated a greater relative proportion of loss of fat mass to lean mass than those treated with semaglutide, and this has been flagged, as you know, as a significant potential risk with currently approved GLP-1 drugs.

Speaker Change: With these exciting accomplishments, we are now gearing up for a catalyst-rich second half of 2024, including key inflection points across both platforms.

Harry: Back to Roveda clinical development. As you'll remember, remain one is our pivotal study for weight maintenance after GLP1 drug discontinuation in obesity. Having obtained FDA IDE approval for the study at the end of Q1, we are pleased to report that we have now initiated the study and are actively enrolling at several centers in the United States. We see incredible enthusiasm from physicians and patients as we begin to ramp up study enrollment and we anticipate reporting a midpoint data analysis in the second quarter of 2025 which will evaluate approximately 45 patients who have been randomized and followed for 12 weeks post treatment with Roveda or sham.

Speaker Change: With these exciting accomplishments, we are now gearing up for a catalyst-rich second half of 2024, including key inflection points across both platforms.

Speaker Change: In REVITA, we will have initial data from the REVEAL1 Open Label cohort in weight maintenance by the end of the year, in addition to ongoing updates from our Germany Real World Registry data impacting REVITA's potential in both obesity and in type 2 diabetes.

Speaker Change: In REVITA, we will have initial data from the REVEAL1 open label cohort in weight maintenance by the end of the year, in addition to ongoing updates from our Germany Real World Registry data impacting REVITA's potential in both obesity and in type 2 diabetes.

Speaker Change: In REJUVA, we anticipate completing IND-enabling studies for REJUVA-1, our first candidate targeting type 2 diabetes, as well as additional data presentations on the REJUVA GLP-1 platform and major scientific congresses in the second half of the year.

Harry: These are patients who are not previously under Zepatite who will be achieving 15% total body weight loss and then Zepatite will be discontinued and they will be randomized and then followed for 12 weeks. In parallel, we are beginning to enroll patients in our open label reveal one core for people who are already on a GLP1 drug and looking for an off ramp to keep the weight off after stopping these. Drugs. We anticipate reporting early data from the Reveal 1 Open Label Covert in the fourth quarter of 2024. Both remain one and reveal one underscore our important commitment to this area of weight maintenance after GLP1 discontinuation.

Speaker Change: We will also be nominating our second candidate, Rejuva2, for obesity in the second half of the year.

Speaker Change: We will also be nominating our second candidate, Rejuva 2, for obesity in the second half of the year.

Speaker Change: We are very excited with the progress our team has made and the near-term data we plan to share across both programs, which we believe will reinforce our leadership position in addressing the massive unmet need in obesity to offer sustained solutions for obesity and metabolic disease.

Speaker Change: And before I pass the call over to Lisa, I also want to provide another business update.

Speaker Change: And before I pass the call over to Lisa, I also want to provide another business update. Alan Will, our longtime chair of the board, has decided to step down from our board after 12 years of distinguished service.

Speaker Change: Alan Will, our longtime chair of the board, has decided to step down from our board after 12 years of distinguished service. We are fortunate to have benefited from Alan's guidance as chair over these last 12 years. His leadership helped us to grow from an early-stage research company to a public company with two pivotal studies in two major disease categories and an exciting gene therapy pilot. We are grateful for his years of service, and we wish him the very best. Alan will serve as an advisor to Ajay Royan, who has been appointed as the new Chair of the Board.

Speaker Change: We are fortunate to have benefited from Alan's guidance as chair over these last 12 years. His leadership helped us to grow from an early stage research company to a public company with two pivotal studies in two major disease categories and an exciting gene therapy pipeline.

Harry: Turning toward Reveeda for Type 2 Diabetes. Our goal with Revitalize 1 is to establish Reveeda as a safe, effective and straightforward treatment alternative to medication escalation for patients with Type 2 Diabetes. As we are beginning to see in Germany, we believe patients may choose this as early as second-mind or as an alternative to initiating injectables or insulin or escalating insulin therapy. The common factor influencing patient behavior is that the desire to have better disease control while avoiding medication escalation.

Speaker Change: We are grateful for his years of service and we wish him the very best.

Speaker Change: Alan will serve as an advisor to Ajay Royan who has been appointed as a new chair of the board.

Speaker Change: I am pleased that Ajay will step in as Chair during this critical inflection point for Fractyl. His passion, extensive experience, and strategic vision will be invaluable as we accelerate development of our products towards potential regulatory, approval, and commercialization.

Harry: In June we announced our plans to significantly expand our Revitalize 1 Pivotal Study of Reveeda to include patients with Type 2 Diabetes who are inadequately controlled on any glucose lowering agent including GLP1s and or insulin, thereby expanding our potential U.S, treatment population by about sixfold. We continue to enroll the study and anticipate reporting top-line data in mid 2025.

Speaker Change: With that, I will now turn the call to Lisa to provide an update on our second quarter financials.

Speaker Change: With that, I will now turn the call to Lisa to provide an update on our second quarter financials. Lisa?

Speaker Change: Lisa?

Speaker Change: Thank you, Harry.

Speaker Change: In the second quarter of 2024, revenue was generated from our commercial pilot in Germany and enabled patients to enroll in the German Railroad Registry System.

Lisa Davidson: Thank you, Harith. In the second quarter of 2024, revenue was generated from our commercial pilot in Germany and enabled patients to enroll in the German Railroad Registry Study.

Lisa Davidson: Turning to operating expenses.

Lisa Davidson: Research and development expense in the second quarter of 2024 were $16.8 million compared to $9.1 million for the same period in 2023. The increase during the quarter was primarily due to the initiation of the Remain-1 study, the progress made in the Revitalize-1 study, and continued development of the REJUVA program, as well as increased personal-related expenses, including stock-based compensation.

Lisa Davidson: Turning to Operating Expenses.

Harry: Finally, we wanted to turn to our nutrient response of GLP1 gene therapy platform, Rajuva. We continue to generate pre-clinical data that excites the scientific and medical community for the potential game-changing nature of this platform. We have shared new head-to-head pre-clinical data comparing Rajuva to semaglotide, which demonstrated that treatment with Rajuva yielded robust and durable weight loss in mice, with diet-induced obesity, and also enabled sustained weight maintenance following semaglotide withdrawal. Importantly, mice treated with Rajuva demonstrated a greater relative proportion of loss of fat mass to lean mass than those treated with semaglotide, and this has been flagged, as you know, as a significant potential risk with currently approved GLP1 drugs.

Lisa Davidson: Research and development expense in the second quarter of 2024 were $16.8 million compared to $9.1 million for the same period in 2023.

Lisa Davidson: The increase during the quarter was primarily due to the initiation of the Remain-1 study, the progress made in the Revitalize-1 study, and continued development of the REJUVA program, as well as increased personal related expenses, including stock-based compensation.

Lisa Davidson: Selling general and administrative expense in the second quarter of 2024 was $6.2 million compared to $2.8 million in the same period in 2023. The increase was primarily due to professional service expenses and other costs associated with operating as a publicly traded company, and increased personnel-related expenses, including stock-based compensation.

Lisa Davidson: Selling General and Administrative Expense in the second quarter of 2024 was $6.2 million compared to $2.8 million in the same period in 2023.

Lisa Davidson: The increase was primarily due to professional service expenses and other costs associated with operating as a publicly traded company.

Lisa Davidson: and increased personal-related expenses, including stock-based compensation.

Harry: With these exciting accomplishments, we are now gearing up for a catalyst-rich second half of 2024, including key inflection points across both platforms. In Ravita, we will have initial data from the reveal one open label cohort in weight maintenance by the end of the year, in addition to ongoing updates from our Germany real-world registry data, impacting Ravita's potential in both obesity and in type 2 diabetes. In Rajuva, we anticipate completing IND enabling studies for Rajuva 1, our first candidate targeting type 2 diabetes, as well as additional data presentations on the Rajuva GLP1 platform and major scientific congresses in the second half of the year.

Lisa Davidson: For the second quarter of 2024, we reported a net loss of $17.2 million, compared to a net loss of $30.2 million for the same period in 2023. The decrease in net loss was primarily attributed to the non-cash change in fair value of notes payable and warrant liabilities, as well as increased interest income, offset by the increase in operating costs.

Lisa Davidson: For the second quarter of 2024, we reported a net loss of $17.2 million compared to a net loss of $30.2 million for the same period in 2023.

Lisa Davidson: The decrease in that loss was primarily attributed to the noncash change in fair value of notes payable and warrant liabilities, as well as increased interest income offset by the increase in operating expenses.

Lisa Davidson: As of June 30, 2024, we had cash and cash equivalent of $102.4 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 into Q4 2025.

Lisa Davidson: As of June 30, 2024, we had cash and cash equivalent of $102.4 million.

Lisa Davidson: I will now turn the call back to, Thank you, Lisa.

Lisa Davidson: Based on our current development plans, we believe cash and cash equivalents will be sufficient to fund our operations through expected key company milestones into Q4 2025. I will now turn the call back to Harit.

Harry: We will also be nominating our second candidate, Rajuva 2, for obesity in the second half of the year. We are very excited with the progress our team has made, and the near-term data we plan to share across both programs, which we believe will reinforce our leadership position in addressing the massive unmet need in obesity to offer sustained solutions for obesity and metabolic disease.

Lisa Davidson: As you can see, we've made significant progress over the last quarter to take advantage of our unique opportunity to become an industry leader in weight maintenance.

Harit: Thank you, Lisa. As you can see, we've made significant progress over the last quarter to take advantage of our unique opportunity to become an industry leader in weight maintenance.

Harit: While there seems to be a new drug targeting obesity every month that promises improved tolerability or a new mechanism, the truth remains that they are all seeking to tackle the obesity epidemic in the same way, through chronic administration, which is simply not sustainable for most people.

Speaker Change: While there seems to be a new drug targeting obesity every month that promises improved tolerability or a new mechanism, the truth remains that they are all seeking to tackle the obesity epidemic in the same way, through chronic administration, which is simply not sustainable for most people.

Harry: And before I pass the call over to Lisa, I also want to provide another business update.

Harry: Alan Will, our longtime chair of the board, has decided to step down from our board after 12 years of distinguished service. We are fortunate to have benefited from Allen's guidance as chair over these last 12 years. His leadership helped us to grow from an early-stage research company to a public company with two pivotal studies in two major disease categories and an exciting gene therapy pipeline. We are grateful for his years of service and we wish him the very best.

Speaker Change: At Fractyl, our goal is to provide solutions that free people from the burden of obesity and metabolic disease through sustainable solutions that have lasting benefits and do not depend on long-term adherence. As we enter the second half of 2024, we have several key clinical and preclinical milestones that have the potential to help us realize our vision of delivering durable disease-modifying therapies to patients suffering from metabolic disease.

Fatpractyl: At Fractyl, our goal is to provide solutions that free people from the burden of obesity and metabolic disease through sustainable solutions that have lasting benefits and do not depend on long-term adherence.

Speaker Change: As we enter the second half of 2024, we have several key clinical and preclinical milestones that have the potential to help us realize our vision of delivering durable disease-modifying therapies to patient suffering from metabolic disease.

Speaker Change: I would like to take this opportunity to thank the patients and physicians who continue to put their trust in us and our products, the employees at Fractyl who are laser-focused on delivering life-changing therapies, and you, our shareholders.

Harry: Allen will serve as an advisor to Ajay Royan who has been appointed as a new chair of the board. I am pleased that Ajay will step in as chair during this critical inflection point for Fractyl his passion, extensive experience and strategic vision will be invaluable as we accelerate development of our products towards potential regulatory approval and commercialization.

Speaker Change: I would like to take this opportunity to thank the patients and physicians who continue to put their trust in us and our products.

Speaker Change: the employees at Fractal who are laser-focused on delivering life-changing therapies, and you, our shareholders. We are grateful for your support and more optimistic than ever before about our prospects to deliver on our promises.

Speaker Change: We are grateful for your support and more optimistic than ever before about our prospects to deliver on our promise.

Speaker Change: And with that, we will now open the call up for questions.

Lisa Davidson: With that, I will now turn the call to Lisa to provide an update on our second quarter financials. Lisa? Thank you, Harry. In the second quarter of 2024, revenue was generated from our commercial pilot in Germany and enabled patients to enroll in the German real-world registry study. Turning to operating expenses, research and development expense in the second quarter of 2024 were 16.8 million compared to 9.1 million for the same period in 2023.

Speaker Change: Thank you very much.

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

Speaker Change: As a reminder, to ask a question, you will need to press star 1-1 on your telephone.

Speaker Change: i

Speaker Change: As a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the question queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster.

Speaker Change: To remove yourself from the question queue, you may press star 1-1 again.

Speaker Change: Please stand by while we compile the Q&A roster.

Speaker Change: The first question, comes from the line of Jason Gerberry of B of A.

Speaker Change: Our first question.

Speaker Change: Comes from the line of Jason Gerberry of B of A.

Speaker Change: Oh, hi, this is Chi on for Jason this afternoon.

Lisa Davidson: The increase during the quarter was primarily due to the initiation of the remain one study, the progress made in the revitalized one study and continued development of the renewable program, as well as increased personal related expenses, including stock-based compensation. Selling general and administrative expense in the second quarter of 2024 was 6.2 million compared to 2.8 million in the same period in 2023. The increase was primarily due to professional service expenses and other costs associated with operating the publicly traded company and increased personal related expenses, including stock-based compensation.

Speaker Change: Oh, hi, this is Chi on for Jason this afternoon. Thanks for all the update and thanks for taking our questions.

Speaker Change: We have two questions, maybe the first one on Bravita, given you have some data coming out from the review one open label data in fourth quarter.

Speaker Change: I'm hoping that you can maybe provide a little bit more color on your expectation for the open-labeled data in 4Q. How large might the sample size be, and would you expect the follow-up to be sufficiently long enough?

Speaker Change: to get an initial read on the efficacy and way making of this.

Lisa Davidson: For the second quarter of 2024, we reported a net loss of 17.2 million compared to a net loss of 30.2 million for the same period in 2023. The decrease in that loss was primarily attributed to the non-cash change in fair value of notes payable and warrant liabilities, as well as increased interest income offset by the increase in operating expenses. As of June 30, 2024, we had cash and cash equivalent of 102.4 million. Based on our current development plans, we believe cash and cash equivalents will be sufficient to fund our operations to your expected key company milestones into Q4 2025.

Speaker Change: And looking more broadly into next year, you will also have some control data from the Remain 1 study in second quarter 25, hoping you can provide some color to discuss how might the

Speaker Change: initial Review 1 data helped inform the Revita therapeutic potential ahead of the Baker second quarter 25 update and an actual follow-up after this.

Speaker Change: Thanks for all the update and thanks for taking up questions.

Speaker Change: Great. Thank you, Chief. Appreciate the question.

Speaker Change: We have 2 questions.

Speaker Change: Um...

Speaker Change: Everyone knows we're really excited about the Remain Pivotal study. It has two arms. One of them is the reveal one arm for people who are already on GLP-1s and looking for an off-ramp.

Speaker Change: Maybe the 1st 1 on Bravita.

Harry: I will now turn the call back to Harit. Thank you, Lisa. As you can see, we've made significant progress over the last quarter to take advantage of our unique opportunity to become an industry leader in weight maintenance. While there seems to be a new drug targeting obesity every month that promises has improved tolerability or a new mechanism, the truth remains that they are all seeking to tackle the obesity epidemic in the same way, through a chronic administration, which is simply not sustainable for most people.

Speaker Change: Uh, given you have some data coming out from the review 1 open label data in 4th quarter, I'm hoping that you can maybe provide a little bit more color on your expectation for the open label data in 4Q.

Speaker Change: Um, how large might the sample size be?

Speaker Change: And that will be an open-label study wherein we will be enrolling subjects who are currently taking either semaglutide or trizepatide.

Speaker Change: and will be discontinuing the therapy immediately before giving them Revita. We anticipate that within four to eight weeks...

Speaker Change: Patients will have

Speaker Change: a increase in hunger and will have steadily increasing weight.

Harry: Fat practice, our goal is to provide solutions that free people from the burden of obesity and metabolic disease, through sustainable solutions that have lasting benefits and do not depend on long-term adherence. As we enter the second half of 2024, we have several key clinical and pre-clinical milestones that have the potential to help us realize our vision of delivering durable disease-modifying therapies to patient suffering from metabolic disease. I would like to take this opportunity to thank the patients and physicians who continue to put their trust in us and our products. The employees at Fractyl who are laser focused on delivering life-changing therapies and you are shareholders.

Speaker Change: Regain.

Speaker Change: if they do not benefit from the therapy, because that is what we have seen from studies of semaglutide withdrawal or terzapatide withdrawal in the randomized trials that they have presented, but also in routine clinical practice.

Speaker Change: And would you expect to follow up to be sufficiently long enough to get an initial read on the main the efficacy and way making?

Speaker Change: We're giving patients digital scales that will allow us to get daily readings on what their weights are and we'll be getting

Speaker Change: them to come into the clinic at week four, and then again at week 12. And we're gonna have data from the first 10 patients.

Speaker Change: emerging at the end of the year, and we anticipate enrolling a total of 20 patients in this open-label study, so we'll have accruing data into Q1 of 2025. I do believe that if Revita is helping

Speaker Change: And looking more broadly into next year, you will also have some control data from the Remain-1 study in second quarter 25, hoping you can provide some color to discuss how might the initial Review-1 data help inform the revita therapeutic potential ahead of the bigger second quarter 25 update and then a full follow-up update.

Harry: We are grateful for your support and more optimistic than ever before about our prospects deliver on our promises.

Operator: And with that, we will now open the call-up for questions. Thank you very much. As a reminder to ask a question, you will need to press star 1-1 on your telephone to remove yourself from the question you may press star 1-1 again. Please stand by while we compile the Q&A roster.

Speaker Change: Great.

Speaker Change: Thank you, Chi.

Speaker Change: Appreciate the question.

Speaker Change: to preserve weight loss in these individuals, you're going to begin to see that very soon after they stop their GLP-1. You're going to see that based on how hungry they feel. You're going to see that based on how their weight trajectories look. And I do believe that that will be predictive, as is the German registry data of what we might expect to see in terms of the ability to sustain a lower weight for a prolonged period of time.

Speaker Change: As everyone knows, we are really excited about the Remain Pivotal study. It has two arms. One of them is the reveal one arm for people who are already on GLP-1s and looking for an off-ramp.

Jason Gerberi: Our first question comes from the line of Jason Gerberi of BLA. Oh, hi. This is P for Jason.

Speaker Change: Now turning to your question about the Remain midpoint data analysis.

Speaker Change: We have heard from players in the space.

Harry: This afternoon, thanks for all the updates and thanks for taking out the questions. We have two questions. May be the first one on Reveeda. Given you have some data coming out from the review on open label data in fourth quarter. I'm hoping that you can maybe provide a little bit more color on your expectation for the open label data and for Q. How large might the sample size be and would you expect the follow-up to be sufficiently long enough to get an initial read on the main, the efficacy and weight maintenance.

Speaker Change: That controlled data would be valuable in order to be able to de-risk the clinical and regulatory opportunity for

Speaker Change: Revita in weight maintenance and so we have built into the study a plan to do an interim or sorry a midpoint analysis of 45 subjects at 12 weeks of follow-up

Speaker Change: And that will be an open-label study wherein we will be enrolling subjects who are currently taking either semaglutide or trazepatide and will be discontinuing the therapy immediately before giving them Revita.

Speaker Change: wherein there will be a two-to-one randomization between Revita and Sham.

Speaker Change: We anticipate that within four to eight weeks, patients will have an increase in hunger and will have steadily increasing weight regain if they do not benefit from the therapy. Because that is what we have seen from studies of semaglutide withdrawal or trazepatide withdrawal in the randomized trials that they have presented, but also in routine clinical practice.

Speaker Change: So, the basic question is, what does the trajectory of weight regain look like in the Revita arm versus the sham arm over that 12-week period of time? And are we beginning to see that there is a separation between the two groups that would enable us to predict?

Speaker Change: We're giving patients digital scales that will allow us to get daily readings on what their weights are, and we'll be getting them to come into the clinic at week four and then again at week 12.

Harry: And looking more broadly into next year, you will also have some control data from the remain one study in second quarter 25. I hope you can provide some color to discuss how might the initial review one data help inform the Reveeda therapeutic potential ahead of the Baker second quarter 25th update and enough for follow-up after this.

Speaker Change: the likelihood of success in achieving our primary endpoint, efficacy endpoint, at 24 weeks. And that's the data that we will begin to present in Q2, and you can obviously imagine that we'll be continuing to follow those patients, and we'll give you data updates into the back half of 25 as well.

Harry: Great. Thank you. Appreciate the question. As everyone knows, we are really excited about the remain pivotal study. It has two arms. One of them is the reveal one arm for people who are already on GLP ones and looking for an off ramp. And that will be an open label study wherein we will be enrolling subjects who are currently taking either some agglatine orchards up the tide and will be discontinuing the therapy immediately before giving them a giving them Reveeda.

Speaker Change: Before I move to my second question, I just want to confirm your fourth quarter data. You said you expect maybe somewhere around 10 patients' worth of data. Will they have, say, four weeks of follow-up so that you can get an initial week on the efficacy and weight maintenance?

Speaker Change: And we're going to have data from the first 10 patients emerging at the end of the year, and we anticipate enrolling a total of 20 patients in this open-label study, so we'll have accruing data into Q1 of 2025.

Speaker Change: Would you expect to follow patients longer, maybe sometime in their 25, before you can get a read of the weight maintenance therapeutic potential?

Speaker Change: I do believe that if Revita is helping preserve weight loss in these individuals, you're going to begin to see that very soon after they stop their GLP-1.

Speaker Change: I think you're going to start to get a signal with those 10 patients at least at four weeks in terms of their clinic visit, but we're also planning to have digital scales that will give us a more real-time read on how these patients are doing.

Harry: We anticipate that within four to eight weeks, patients will have an increase in hunger and will have steadily increasing weight regain if they do not benefit from the therapy. Because that is what we have seen from studies of some agglatine withdrawal orchards appetite withdrawal in the in the randomized trials that they have that they have presented, but also in routine clinical practice. We're giving patients digital scales that will allow us to get daily readings on what their weights are and we'll be getting them to come into the clinic at week four and then again at week 12.

Speaker Change: You're going to see that based on how hungry they feel.

Speaker Change: however long they've been followed after the procedure. And the beautiful thing about this is you're just gonna see those curves and see how they're beginning to play out over time. We'll have to compare that to what you would expect with terzepatide withdrawal from the terzepatide surmount floor study.

Speaker Change: You're going to see that based on how their weight trajectories look, and I do believe that that will be predictive, as is the German registry data of what we might expect to see in terms of the ability to sustain a lower weight for a prolonged period of time.

Speaker Change: Now, turning to your question about the Remain midpoint data analysis, you know, we have heard from players in the space that controlled data would be valuable in order to be able to de-risk the clinical and regulatory opportunity for Revita in weight maintenance, and so we have built into the study a plan to do an interim, sorry, a midpoint analysis of 45 subjects, at 12 weeks of follow-up, wherein there will be a two-to-one randomization between Revita and Sham.

Speaker Change: So the basic question is, what does the trajectory of weight regain look like in the Revita arm versus the Sham arm over that 12-week period of time?

Speaker Change: And are we beginning to see that there is a separation between the two groups that would enable us to predict the likelihood of success in achieving our primary efficacy endpoint at 24 weeks?

Speaker Change: And that's the data that we will begin to present in Q2.

Speaker Change: And you can obviously imagine that we'll be continuing to follow those patients.

Speaker Change: Got it. Thanks. And maybe moving on to my second question on Rejuva Euclid 1 gene therapy.

Speaker Change: And we'll give you data updates into the back half of 25 as well.

Speaker Change: I'm curious. Can you provide a bit more color on how close you are to completing the INDM-enabling work?

Speaker Change: Um...

Speaker Change: Do you expect the regulatory hurdle for at least for clinical trial initiation to be pretty straightforward based on conversations you may have already had with the regulator or regulators?

Harry: And we're going to have data from the first 10 patients emerging in the four and at the end of the year. And we anticipate enrolling a total of 20 patients in this open label study, so we'll have accruing data into q1 of 2025. I do believe that if Reveeda is helping preserve weight loss in these individuals, you're going to begin to see that very soon after they stop their GLP one. You're going to see that based on how hungry they feel.

Speaker Change: And given your plan to initiate a first-in-human study first half next year, curious when my investor, you know, can expect to see initial human data for the REJUVA program. Thanks so much.

Harry: You're going to see that based on how their weight trajectories look. And I do believe that that will be predictive as is the German registry data of what we might expect to see in terms of the ability to sustain a lower weight for a prolonged period of time now turning to your question about the remain midpoint data analysis. We have heard from players in the space that control data would be valuable in order to be able to de-risk the clinical and regulatory opportunity for Reveeda in weight maintenance.

Speaker Change: Got it.

Speaker Change: Before I move to my second question, I just want to confirm your fourth quarter data.

Chi: Yeah, great question Chi, I think that

Speaker Change: We have met with regulators in Europe to discuss our REJUVA-1 preclinical development and we have alignment with them on the preclinical animal models to be used, which are the DBDB mice and the Yucatan pig.

Speaker Change: You said you expect maybe somewhere around 10 patients' worth of data.

Speaker Change: small animal model for efficacy, large animal model for safety toxicology because it mimics the human route of administration.

Speaker Change: We already have extensive experience and have already shown data on all of the above.

Speaker Change: with REJUVA-001 candidates and are working our way through the same with our development candidates itself.

Harry: And so we have built into the study a plan to do an interim, sorry, a midpoint analysis of 45 subjects at 12 weeks to follow up. Health, wherein there will be a 2-to-1 randomization between Revita and Sham. So the basic question is, what does the trajectory of weight regain look like in the Revita arm versus the Sham arm over that 12-week period of time? And are we beginning to see that there is a separation between the two groups that would enable us to predict the likelihood of success in achieving our primary end point, efficacy and the data that we will begin to present in Q2?

Speaker Change: We've also come to an alignment with regulators about the types of biodistribution studies that need to be completed and

Speaker Change: The patient population being individuals who are inadequately controlled with type 2 diabetes who are already on a GLP-1 drug therapy and are

Speaker Change: able to benefit from it and tolerate it in order to be able to de-risk both the safety and the potential efficacy of the REJUVA-1 candidate in that type 2 diabetes patient population. So we have alignment on all of those things. I do think that we have

Speaker Change: some work to do to finalize the CMC requirements, and we will be working to gain greater clarity on that in the second half of 2024. And that will be the major next step before we feel like we're ready to file for a first-in-human study.

Harry: And you can obviously imagine that we'll be continuing to follow those patients and we'll give you data updates into the back half of 25 as well. Data, before I move to my second question, I just want to confirm if your first quarter of data is said you expect maybe somewhere around 10 patients will put data, would they have say four-week of follow-ups so that you can get an initial week on the efficacy and weight maintenance or would you expect to follow patients longer, maybe sometime into 25 before you can get a rate of the weight maintenance and therapeutic potential?

Speaker Change: Will they have, say, a four-week follow-up so that you can get an initial read on the efficacy and weight maintenance?

Speaker Change: Oh, great. Um, so, um, do you talk about, you know, do you have any expectation for any, uh, the timing for initial human data? Do you expect maybe some in preliminary safety data and second up 25 or too early to tell at this point?

Speaker Change: Or would you expect to follow patients longer, maybe sometime in their 25, before you can get a read of the weight maintenance therapeutic potential?

Harry: I think you're going to start to get a signal with those 10 patients at least four weeks in terms of their clinic visit, but we're also planning to have digital scales that will give us a more real-time read on how these patients are doing over the however long they've been followed after the procedure. And the beautiful thing about this is you're just going to see those curves and see how they're beginning to play out over time, we'll have to compare that to what you would expect with terseptide withdrawal from the terseptide surmount four study. Got it. Thanks.

Speaker Change: We do expect that, you know, I think that you're going to get some, the safety that you're going to be looking to pay attention to here is.

Speaker Change: And the beautiful thing about this is you're just going to see those curves and see how they're beginning to play out over time.

Speaker Change: is the procedure itself.

Speaker Change: causing any injury.

Speaker Change: and we are feeling confident that it won't based on our extensive experience in preclinical models because of our experts who have been advising us in the development of this technique. Nevertheless, that should be an early signal.

Speaker Change: And then you're going to be wondering about the safety of the AAV itself.

Speaker Change: that's usually a question that emerges over a four to six week period of time immediately after the intervention.

Harry: And maybe moving on to my second question on Rejuve Euclid-1 gene therapy, I'm curious can you provide the more color on how close you are to completing the IND and enabling work? Do you expect the regulatory hurdle for at least for clinical trial initiation to be pretty strict or based on conversations you may have already had with the regulator or regulators? And given your plan to initiate a first in human study, first half next year, curious when my investor, you know, can expect to see in racial human data for the Rejuve program.

Speaker Change: but the questions around the efficacy and safety of the GLP-1, as you know from other gene therapies, will take weeks to months and I think that that's going to be a question that we're going to begin to be able to answer in the back half of 25.

Speaker Change: Great. Thanks so much for all the color. Looks like a lot of different data updates for various across your pipeline portfolio next 12 months and we look forward to seeing those updates evolve.

Speaker Change: Great, thank you so much.

Speaker Change: We'll have to compare that to what you would expect with trizepatide withdrawal from the trizepatide surmount floor study.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Michael of Morgan Stanley.

Speaker Change: Got it.

Harry: Thanks so much. Yeah. Great question, Chi. I think that we have met with regulators in Europe to discuss our Rejuve-1 preclinical development. And we have alignment with them on the preclinical animal models to be used, which are the DBDB mice and the Eucatan pig, small animal model for efficacy, large animal model for safety toxicology because it mimics the human route of administration. We already have extensive experience and have already shown data on all of the above with Rejuve-0-0-0-1 candidates and are working our way through the same with our development candidates itself.

Speaker Change: Hey guys, thanks for taking the question. Maybe just to follow up on some of the earlier questions related to obesity.

Speaker Change: I'm not sure how much you can comment here, but just, if you could talk about the early rate of enrollment in remain and just maybe how that's tracking versus your expectations. Hi, Mike, we started enrolling earlier this.

Speaker Change: Thanks.

Mike: Earlier this month.

Speaker Change: We just announced it today. What we are seeing is that there's a lot of interest and enthusiasm, there's a bunch of patients who are lining up in the first centers to come in. This is consistent with what other people see in obesity trials, which tend to enroll five times as rapidly as some other studies.

Harry: We do, we've also come to an alignment with regulators about the types of bi-distribution studies that need to be completed. And the patient population being individuals who are inadequately controlled with type 2 diabetes who are already on a GLP-1 drug therapy and are able to benefit from it and tolerate it in order to be able to de-risk both the safety and the potential efficacy of the Rejuve-1 candidate in that type 2 diabetes patient population.

Speaker Change: And so we're feeling encouraged but it's still very early days and we'd be happy to update you later on in the year as it progresses and we have a little few more data points that we can we can call upon.

Speaker Change: Yep, makes sense.

Speaker Change: Are you seeing more, are you seeing faster enrollment maybe in?

Speaker Change: in the reveal, sort of.

Harry: So we have alignment on all of those things, some work to do to finalize the CMC requirements and we will be working to great gain greater clarity on that in the second half of 2024 and that will be the major next step before we feel like we're ready to file for a first in-human study.

Speaker Change: You know, open label cohort versus remain, you know, just because patients will have the opportunity to get on a one first.

Speaker Change: And maybe moving on to my second question on Rejuva, Euclid 1 gene therapy.

Speaker Change: I'm curious.

Speaker Change: Can you provide a bit more color on how close you are to completing the IND enabling work?

Speaker Change: Yeah, so to be to be clear the sites that are actively enrolling so far are sites that are obesity centers

Speaker Change: Do you expect the regulatory hurdle, at least for clinical trial initiation, to be pretty straightforward based on conversations you may have already had with the regulator or regulators?

Speaker Change: not yet the endoscopy centers.

Speaker Change: And so we are going to be enrolling the reveal portion at hospitals that offer the endoscopy for logistical reasons. We anticipate those patients will start coming in later on in the quarter. These first patients who are coming in are the ones that we're starting to put on traceptide so that we can see the randomized data because that's a long pull on the tent for us.

Harry: Great. So do you talk about, you know, do you have any expectation for the timing for our initial human data? Do you expect maybe some in preliminary safety data in second up to 25 or truly to tell at this point? We do expect that, you know, I think that you're going to get some, the safety that you're going to be looking to pay attention to here is the procedure itself causing any injury and we are feeling confident that it won't based on our expensive experience and pre-clinical models because of our experts who have been advising us in the development of this technique.

Harry: Nevertheless, that should be an early signal and then you're going to be wondering about the safety of the AAV itself and that's usually a question that emerges over a four to six week period of time immediately after the intervention but the questions around the efficacy and safety of the GLP1 as you know from other things therapies will take weeks to months and I think that that's going to be a question that we're going to begin to be able to answer in the back half of 25.

Speaker Change: Got it. Makes sense. Thanks. Thank you.

Speaker Change: Thank you. Our next question.

humor refot: Comes from the line of Umar Rafat of Evercore.

humor refot: And given your plan to initiate a first-in-human study first half next year, I'm curious when my investor can expect to see initial human data for the REJUVA program.

humor refot: Hi guys, thanks so much for taking my question and congrats on all the progress this quarter. Just two questions for me. One, I just want to revisit the Open Label Registry data that you reported recently, I think last week. The weight loss data in this data cut definitely seems to have improved versus the three-month data cut.

humor refot: Thanks so much.

humor refot: presented at the DDG meeting in May. So, I'm curious to see how this new data cut varied among individual patients.

humor refot: Also, in the DDG analysis, I think roughly one-third of the patients were on GLP-1s at baseline. And my question is, how far along into their GLP-1 therapy

Harry: Great. Thanks so much for all the color looks like a lot of different data updates for various across your pipeline portfolio next 12 months and we look forward to seeing those updates evolved. Great. Thank you so much.

Speaker Change: Where are they at baseline? Were they already kind of at steady state or did they just begin? And then have a follow-up.

Speaker Change: Yeah.

Speaker Change: Thank you for that question, Chi.

Speaker Change: Great, great question.

Speaker Change: I think that we have met with regulators in Europe to discuss our REJUVA-1 preclinical development, and we have alignment with them on the preclinical animal models to be used, which are the dbdb mice and the Yucatan pig, small animal model for efficacy, large animal model for safety, toxicology, because it mimics the human route of administration. We already have extensive experience and have already shown data on all of the above with REJUVA-001 candidates and are working our way through the same with our development candidates itself.

Speaker Change: If you look back at our full analysis from our Revita clinical studies, what you will observe is a trend towards greater weight loss over time, over the period of one year, in about 100 patients who were treated and followed in Revita clinical studies, people with type 2 diabetes.

Operator: Thank you.

Mike: My next question comes from the line of my goals of Morgan Stanley. Hey guys, thanks for taking the question. Maybe just to follow up on some of the earlier questions related to obesity and not sure how much you can comment here but just if you could talk about the early rate of enrollment in remain and just maybe how that's tracking versus your you know expectations thanks. Hi Mike. We started enrolling earlier this earlier this month.

Speaker Change: We've also come to an alignment with regulators about the types of biodistribution studies that need to be completed and the patient population being individuals who are inadequately controlled with type 2 diabetes who are already on a GLP-1 drug therapy and are able to benefit from it and tolerate it in order to be able to de-risk both the safety and the potential efficacy of the REJUVA-1 candidate in that type 2 diabetes patient population. So we have alignment on all of those things.

Speaker Change: I do think that we have.., some work to do to finalize the CMC requirements, and we will be working to gain greater clarity on that in the second half of 2024.

Speaker Change: And that will be the major next step before we feel like we're ready to file for approval.

Speaker Change: Oh, great.

Speaker Change: Um, so, um, do you talk about, you know, do you have any expectation for any the timing for initial human data?

Speaker Change: Do you expect maybe some in preliminary safety data and 2nd of 25 or too early to count?

Speaker Change: We do expect that, you know, I think that you're going to get some, the safety that you're going to be looking to pay attention to here is the procedure itself causing any injury, and we are feeling confident that it won't based on our extensive experience in preclinical models because of our experts who have been advising us in the development of this technique.

Speaker Change: So, that I think is consistent with what we are seeing here in terms of the profile of weight loss over time.

Speaker Change: Nevertheless, that should be an early signal.

Speaker Change: And then you're going to be wondering about the safety of the AAV itself, and that's usually a question that emerges over a four to six week period of time immediately after the intervention.

Speaker Change: But the questions around the efficacy and safety of the GLP-1, as you know from other gene therapies, will take weeks to months, and I think that that's going to be a question that we're going to begin to be able to answer in the back half.

Speaker Change: Great.

Speaker Change: Thanks so much for all the color.

Speaker Change: And this is a really interesting question. Why is the weight loss increasing?

Speaker Change: Looks like a lot of different data updates for various across your pipeline portfolio next 12 months and we look forward to seeing those updates evolve.

Speaker Change: Were you asked about how long people had been on GLP-1s?

Speaker Change: Great.

Speaker Change: And I think you've rightly pointed out that of the 14 patients who were at six months earlier, five of them had been on GLP-1s. Of the 11 patients who are now on GLP-1s,

Speaker Change: Thank you so much.

Mike: We just announced it today. What we are seeing is that there's a lot of interest in enthusiasm where there's a bunch of patients who are lining up in the first centers to come in. This is consistent with what other people see in obesity trials which tend to enroll five times as rapidly as some other studies and so we're feeling encouraged but it's still very early days and we happy to update you later on in the year as the progressives and we have a little few more data points that we can we can call upon.

Speaker Change: Thank you.

Speaker Change: I'm sorry of the 11 patients who are now at one year, exactly four of them were on GLP ones.

Speaker Change: Our next question comes from the line of Michael of Morgan Stanley.

Speaker Change: Hey guys, thanks for taking the question.

Speaker Change: Maybe just to follow up on some of the earlier questions related to obesity.

Speaker Change: at the time that they enrolled in the study. And we understand from the treating physician that they had been on GLP-1s for some period of time, but we really do not have detailed retrospective EMR data to confirm exactly how long they had been on those drugs.

Speaker Change: Not sure how much you can comment here, but just if you could talk about the early rate of enrollment in Remain and just maybe how that's tracking versus your, expectations, earlier this month.

Speaker Change: We just announced it today.

Speaker Change: What we are seeing is that there's a lot of interest and enthusiasm.

Speaker Change: There's a bunch of patients who are lining up in the first centers to come in.

Speaker Change: This is consistent with what other people see in obesity trials, which tend to enroll five times as rapidly as some other studies.

Speaker Change: And so we're feeling encouraged, but it's still very early days and be happy to update you later on in the year as it progresses and we have a little few more data points that we can we can call upon.

Speaker Change: Are you seeing more... Are you saying faster enrollment maybe in, in the reveal sort of, open label cohort versus remain, you know, just because patients will have the opportunity to get on a GLP-1 first.

Speaker Change: However, a couple of them were on Trulicity, and so you could imagine they probably weren't recently put on Trulicity, and so that suggests to me that they've been on the weight loss on their GLP-1s for some length of time. One of these patients

Mike: Makes sense and are you seeing more or seeing faster enrollment maybe in in the reveal sort of open label cohort versus remain you know just because patients will have the opportunity to get on a GLP one first. Yeah so to be to be clear the sites that are actively enrolling so far are sites that are obesity centers not yet the endoscopy centers and so we're going to be enrolling the reveal portion at hospitals that offer the endoscopy because of for logistical reasons.

Speaker Change: switch their GLP-1 from one agent to another during the follow-up period. Two of them stayed on their GLP-1 throughout the follow-up period and the other one stopped their GLP-1 during the follow-up period and then did not resume it through one year of follow-up.

Speaker Change: So there's a lot of people, a lot of, in the real world, a lot of medication changes happening.

Speaker Change: for these patients. And as a doctor who took care of these patients and as a son of a person who types of diabetes, I can tell you I'm like super sympathetic to the effort required for chronic medical therapy for people with multiple diseases. Lots of different doctors changing medicines all of the time to address symptoms, side effects.

Mike: We anticipate those patients will start coming in later on in the quarter. These first patients who are coming in are the ones that we're starting to put on tersepotide so that we can see the randomized data because that's the long pull on the tent, for us. Got it makes sense. Thanks. Thank you.

Speaker Change: formulary changes, drug-drug interactions, all of the things in the real world that impact a drug's ability to have an effect.

Speaker Change: that you don't really see in phase three clinical trials.

Speaker Change: Despite all of that, what's kind of surprising is that 10 of the 11 patients have these...

Omer Refot: A next question comes from the line of Omer Refot of Evercore. Hi guys, thanks so much for taking my question and congrats on all of the progress this quarter. It's two questions from me.

Speaker Change: have either reductions or stable medicines over a one-year period of time, and yet are seeing profound improvements in weight and in blood sugar control that's just as strong, if not stronger, at one year than it was at one, three, and six months.

Harry: One is want to revisit the open label registry data that you reported recently, I think last week. The weight loss data in this data cut definitely seems to have improved versus the free month data cut presented at the DDG meeting in May. So I'm curious to see how this new data cut varied among individual patients. Also in the DDG analysis, roughly one-third of the patients were on GLP1's at baseline and my question is how far along into their GLP1 therapy were they at baseline?

Speaker Change: So that's a positive sign for us, but obviously we'll be continuing to follow more patients and we have a public presentation of more data coming up in the fall where we will we can go through a lot more information including patient level data at various time points and really give a lot more color on what we're seeing with larger numbers of people which is going to be important.

Speaker Change: Yeah.

Speaker Change: Bye.

Speaker Change #100: okay so that kind of preempted my follow-up question to that it was that like

Speaker Change #101: Because I know in the DDG data cut at three months, there was considerable variability in the weight loss. I was going to ask...

Harry: Were they already kind of a steady state or did they just begin and then have a follow-up? Great. Great question. So if you look back at our full analysis from our Reveda Clinical Studies, what you will observe is a trend towards greater weight loss over time over the period of one year in about 100 patients who are treated and followed in Reveda Clinical Studies, people with type 2 diabetes. So that I think is consistent with what we are seeing here in terms of the profile of weight loss over time.

Speaker Change #102: whether there were any notable baseline or disease state characteristic differences in patients who didn't lose that much weight. But if you can't comment now, I'll just wait until later on in the year.

Speaker Change #103: Yeah, I think we'll wait till later on in the year, but I don't think we're seeing anything that's different than what other obesity drugs are showing in terms of a waterfall plot of weight over time, but we will go into that in more detail later in the year. Thank you, Mike.

Speaker Change #104: Okay, and then my follow-up question is actually a clarification question on REJUVA, the seminal

Harry: And this is a really interesting question. Why is the weight loss increasing? You asked about how long people had been on GLP1's and I think you've rightly pointed out that of the 14 patients who were at six months earlier, five of them had been on GLP1's. Of the 11 patients who were now on GLP1's, sorry, of the 11 patients who were now at one year, exactly four of them were on GLP1's at the time that they enrolled in the study.

Speaker Change #105: obesity data that was presented at ADA and in the DIO mice. And my question was the semaglutide dose received in mouse what was the equivalent human dose for of that?

Speaker Change #106: Well, in order to be consistent to the db-db data that we had generated earlier, we chose exactly the same dose per kilogram in the mice that we had used in the earlier db-db studies, which was the maximum glucose-lowering dose.

Speaker Change #106: drug concentration seen in somaglutide in those mice. So it would be equivalent to the top dose of what's prescribed for type 2 diabetes in those mice.

Harry: And we understand from the treating physician that they had been on GLP1's for some period of time, but we really do not have detailed retrospective EMR data to confirm exactly how long they had been on those drugs. However, a couple of them were on trulicity, and so you could imagine they probably weren't recently put on trulicity and so that's just to me that they've been on the weight loss on their GLP1's for some length of time.

Speaker Change #106: Yeah.

Speaker Change #106: Um...

Harry: One of these patients switched their GLP1 from one age into another during the follow-up period, two of them stayed on their GLP1's throughout the follow-up period and the other one stopped their GLP1 during the follow-up period and then did not resume it through one year of follow-up. So there's a lot of people, in the real world, a lot of medication changes happening for these patients. And as a doctor who took care of these patients and as a son of a person with type 2 diabetes, I can tell you, I'm like super sympathetic to the effort required for chronic medical therapy for people with multiple diseases, lots of different doctors changing medicines all of the time to address symptoms, side effects, formulary changes, drug-drug interactions, all of the things in the real world that impact a drug's ability to have an effect are that you don't really see in base three clinical trials.

Speaker Change #107: Excellent, and just I guess one really quick follow-up question for the Rejuva Obesity Construct, which is still yet to be Nominated. In addition to the Human GLP-1 promoter that will presumably be included in this construct,

Speaker Change #108: Can you speak to any updates as to what you're thinking of in terms of additional mechanisms that this contract might include and whether adding those additional mechanisms may kind of offset or mitigate the activity or efficacy of the contract?

Speaker Change #109: the original GLP-1 component.

Speaker Change #110: You know, one of the challenges that we have here is an abundance of riches. Candidly, all of these metabolic hormones are small peptides. They can be put together combinatorially or they can be acting independently.

Speaker Change #110: For instance, you could imagine a GLP-1 alone or you could imagine a GIP-GLP-1 combination or you could imagine an amylin alone or any combination thereof. So there's a lot of potential variables to work through.

Harry: Despite all of that, what's kind of surprising is that 10 of the 11 patients have either reductions or stable medicines over a one year period of time and yet are seeing profound improvements in weight and in blood sugar control. That's just as strong, if not stronger, at one year, than it was at one, three, and six months.

Speaker Change #110: And so we are liking what we're seeing with GLP-1 alone. We're also liking what we're seeing in GIP and GLP-1 combinations. And we think that this platform that leverages the human insulin promoter can have

Harry: So that's a positive sign for us, but obviously we'll be continuing to follow more patients and we have a public presentation and more data coming up in the fall where we can go through a lot more information, including patient-level data at various time points and really give a lot more color on what we're seeing with larger numbers of people, which is going to be important. Okay, so that kind of printed my follow-up question to that, it was that like, because I know in the DDG data cut, at three months there was kind of considerable variability in the weight loss.

Speaker Change #110: lot of optionality to it and we're working through some of that and when we nominate the candidate we'll explain to you our rationale for why we chose what we chose.

Speaker Change #110: But just know that we are thinking through all of the possibilities here in order to choose the best path.

Speaker Change #110: from a clinical regulatory perspective with a principled focus on ensuring that what we're doing is going to be safe.

Harry: I was going to ask whether there were any notable baseline or disease-take characteristic differences in patients who didn't lose that much weight. But if you can't comment now, I'll just wait until later on in the year. Yeah, I think we'll wait until later on in the year, but I don't think we're seeing anything that's different than what other obesity drugs are showing in terms of a waterfall plot of weight over time, but we will go into that in more detail later in the year. Thank you, Mike. Okay.

Speaker Change #110: for the population that we're treating. And I think that that has to be the first objective for this therapy because the efficacy signal that we're seeing in terms of obesity with GLP-1 alone is already

Speaker Change #110: very, very meaningful in the preclinical models, so if we're going to add other mechanisms in, we're going to have to be thoughtful about the trade-off between what we already know and what we still have to learn. We'll tell you more later this year.

Harry: And then my follow-up question is on, is that a clarification question on Rejouva, regarding the seminal obesity data that was presented at ADA in the DIO mice? And my question was the semaglutide dose received in mouse? So what was the equivalent human dose of that? Well, in order to be consistent to the DVDB data that we had generated earlier, we chose the exactly the same dose per kilogram in the mice that we had used in the earlier DVDB studies, which was the maximum glucose lowering drug concentration seen in semaglutide in those mice. So it would be equivalent to the top dose of what's prescribed for type 2 diabetes in those mice. Excellent.

Speaker Change #110: Excellent.

Speaker Change #111: Listen, thanks so much for taking my questions, again, congrats on all the progress.

Speaker Change #112: Thank you very much.

Speaker Change #113: In order to wrap up.

Speaker Change #114: Thank you.

Speaker Change #115: I want to thank everyone for joining us this afternoon. We appreciate your continued interest and your support, and we look forward to continuing to share updates on our progress as we seek to change the landscape of obesity and type 2 diabetes. Thank you so much. Talk soon.

Speaker Change #116: This concludes today's conference call. Thank you for participating. You may now disconnect.

Harry: And just, I think it's one really quick follow-up question for the Rejouva obesity construct, which is still yet to be nominated. In addition to the human JLP1 promoter that will presumably be included in this construct, can you speak to any updates as to what you're thinking in terms of additional mechanisms that this construct might include? And whether adding those additional mechanisms may kind of offset or mitigate the activity or efficacy of the original JLP1 component?

Harry: One of the challenges that we have here is an abundance of riches candidly. All of these metabolic hormones are small peptides. They can be put together combinatorially or they can be acting independently. For instance, you could imagine a JLP1 alone, or you could imagine a GIPJLP1 combination, or you could imagine an amulet alone or any combination thereof. So there's a lot of potential variables to work through. And so we are liking what we're seeing with JLP1 alone.

Harry: We're also liking what we're seeing in GIPJLP1 combinations. And we think that this platform that leverages the human insulin promoter can have a lot of optionality to it. And we're working through some of that. And when we nominate the candidate, we'll explain to you our rationale for why we chose what we chose. But just know that we are thinking through all of the possibilities here in order to choose the best pass from a clinical regulatory perspective, with a principle focus on ensuring that what we're doing is going to be safe for the population that we're treating. And I think that that has to be the first objective for this therapy. Because the efficacy signal that we're seeing in terms of obesity with JLP1 alone is already very, very meaningful in the pre-clinical models.

Harry: So if we're going to add other mechanisms in, we're going to have to be thoughtful about the trade-off between what we already know and what we still have to learn, we'll tell you more later, this year. Thank you very much.

Harry: Now in order to wrap up I want to thank everyone for joining us this afternoon. We appreciate your continued interest and your support and we look forward to continuing to share updates on our progress as we seek to change the landscape of obesity and type to diabetes.

Speaker Change #116: [music]

Speaker Change #116: don

Operator: Thank you so much.

Speaker Change #117: I'm I'm I'm I'm I'm I'm I'm I'm I'm

Speaker Change #117: [inaudible]

Speaker Change #117: So, to be clear, the sites that are actively enrolling so far are sites that are obesity centers, not yet the endoscopy centers.

Fracto Health: Good afternoon and welcome to Fractyl Health's second quarter financial results and business updates call.

Fracto Health: And so, we are going to be enrolling the reveal portion at hospitals that offer the endoscopy for logistical reasons.

Speaker Change #119: 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.

Speaker Change #119: We anticipate those patients will start coming in later on in the quarter.

Speaker Change #119: These first patients who are coming in are the ones that we're starting to put on traceptive so that we can see the randomized data because that's the long pool on the 10th.

Speaker Change #119: I will now turn the call over to Steven Jasper. Steven, you may now begin.

Speaker Change #119: Got it.

Speaker Change #119: Makes sense.

Stephen Jasper: Thank you. This afternoon we issued a press release that outlines the topics we plan to discuss today. This release is available at www.fractal.com under the investors tab.

Speaker Change #121: Joining us on the call today are Dr. Harith Rajagopalan, Chief Executive Officer, and Lisa Davidson, Chief Financial Officer.

Speaker Change #122: 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 milestone.

Speaker Change #122: pre-clinical or clinical trial data, the impact of any of our product candidates, the design initiation, timing, and results of clinical enrollment in any clinical trial or readouts,

Speaker Change #122: The potential launch or commercialization of any of our product candidates or products

Speaker Change #122: The sufficiency of our cash, cash equivalents, and investments to fund our operating activities for any specific period of time should be considered overlooking statements within the meaning of the Private Security Litigation Reform Act of 1995.

Speaker Change #122: Such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act.

Speaker Change #122: Actual results could differ materially from those indicated by the forward-looking statements due to the impact of risk, uncertainties, and other important factors.

Speaker Change #122: Participants are directed to the risk factors set forth in Fractal's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2024, and the company's other filings with the SEC.

Speaker Change #122: Any forward-looking statements made today speak only to Fractyl's operations as of today.

Speaker Change #123: Fractyl disclaims any duty to provide updates to its overlooking statements even if subsequent events cause the company's views to change.

Speaker Change #124: It is now my pleasure to tap the call over there who is.

Speaker Change #124: Thank you.

Speaker Change #125: Thank you, Stephen, and good afternoon, everyone. Thank you for joining us on today's call. I'm proud of the progress we've made in the past quarter at Fractal Health as we continue to deliver on our promise to develop transformative therapies that can prevent and reverse metabolic disease.

Speaker Change #125: My next question, comes from the line of Umar Rafat of Evergreen.

Speaker Change #125: Hi, guys.

Speaker Change #126: Several recent achievements underscore the potential of our platform. In the past quarter, we have seen the FDA has awarded Revita a breakthrough device designation for weight maintenance after GLP-1 drug discontinuation.

Speaker Change #126: We've also seen Revita's real-world registry in Germany, having demonstrated through one year of follow-up in an initial cohort, substantial and sustained weight loss and blood sugar control in patients living with obesity and type 2 diabetes.

Speaker Change #126: We have had a significant expansion of our Revitalize One pivotal study protocol and potential patient population for Revita for glucose control in type 2 diabetes.

Speaker Change #126: and an award-winning data presentation of our REJUVA gene therapy platform at the American Diabetes Association, which I will discuss later.

Operator: Talk soon.

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

Speaker Change #126: At the same time, we are disappointed in the disconnect between our substantial progress over the last several quarters and our share price.

Operator: Health Health Health Health[inaudible] Health Health Health Health Health Health Health Health[inaudible] 3-2-3-2-3[inaudible] Good afternoon and welcome to Fractyl Health's second 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 of following management prepared remarks. I will now turn the call over to Stephen Jasper, Stephen, you may now begin. Thank you.

Speaker Change #126: Considering the challenging financial circumstances in the market, we are committed to managing our business with financial discipline, a heightened sense of urgency, and a keen focus on operational execution.

Operator: This afternoon, we issued a press release that outlines the topics we planned to discuss today. This release is available at www.fractyl.com under the Investors tab. Joining us on the call today are Dr. Kareep, Roger Gopalan, Chief Executive Officer, and Lisa Davidson, Chief Financial Officer.

Speaker Change #126: We value the support and feedback from our shareholders and would be happy to engage further to discuss our strategy and prospects.

Speaker Change #127: The management team and I are incredibly optimistic about the near-term prospects for the company and based on our track record and significant progress made since going public in February, we are confident in our ability to execute upon major upcoming value drivers over the next few quarters, which I am excited to walk through today on our call.

Stephen 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 facts, including statements about our objectives and anticipated clinical milestone, pre-clinical or clinical trial data, the impact of any of our product candidates, the design initiation, timing, and results of clinical involvement in any clinical trial or re-outs, the potential launch or commercialization of any of our product candidates or products, the sufficiency of our cash equivalents and investments upon our operating activities for any specific period of time should be considered overlooking statements within the meaning of the Pride of Securities Litigation Reform Act of 1995. Such forward-looking statements are intended to be subject to the safeguard of protection provided by the Reform Act.

Speaker Change #127: As we advance our two platforms, Revita and Rejuva, we see an opportunity to truly bring an end to obesity by developing and delivering disease-modifying therapies that offer scalable, sustained solutions to the disease.

Speaker Change #127: We are laser focused on achieving key upcoming data milestones across both programs that will de-risk our clinical, regulatory, and commercial opportunity.

Speaker Change #127: Thanks so much for taking my question and congrats on all the progress this quarter.

Speaker Change #127: Two questions from me.

Speaker Change #127: beginning with Revita.

Speaker Change #127: 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.

Speaker Change #127: One, I just want to revisit the Open Label Registry.

Stephen Jasper: Actual results can 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 fractals quarterly report on form 10Q filed with the Securities and Exchange Commission on August 14, 2024, and the company's other filings with the SEC. Any forward-looking statements made today speak only to fractals operations as of today. Brackle disclaims any duties to provide updates to its forward-looking statements, even if subsequent events cut the company's views to change.

Speaker Change #127: You can think of it as LASIK, but for obesity.

Speaker Change #127: Revita is on a path towards pivotal data in two very large markets with extraordinary unmet need. The first is weight maintenance after discontinuation of GLP-1-based drugs in obesity, and the second target market is glucose control for people with type 2 diabetes who do not want to escalate medical therapy.

Speaker Change #127: I think last week.

Speaker Change #127: The weight loss data in this data cut definitely seems to have improved versus the three-month data cut, presented at the DDG meeting in May.

Speaker Change #127: Obesity is the single most significant opportunity in health care today. We know GLP-1 drugs have been shown in large clinical trials to be very effective in helping patients achieve weight loss and other cardiometabolic benefits.

Speaker Change #127: So I'm curious to see how this new data cut varied among individual patients.

Speaker Change #127: Also, in the DDG analysis, I think roughly one-third of the patients were on GLP-1s at baseline.

Stephen Jasper: It is now my pleasure to pass the call over to Heres. Thank you, Stephen, and good afternoon everyone. Thank you for joining us on today's call. I'm proud of the progress we've made in the past quarter at Fractal Health as we continue to deliver on our promise to develop transformative therapies that can prevent and reverse metabolic disease. Several recent achievements underscore the potential of our platform. In the past quarter, we have seen the FDA has awarded Rivida a breakthrough device designation for weight maintenance after GLP-1 drug discontinuation.

Speaker Change #128: However, there is considerable debate about how to quantify the true impact these drugs will have on healthcare outcomes in the real world.

Speaker Change #128: And my question is, how far along into their GLP-1 therapy?

Speaker Change #129: Why is that? High rates of GLP1 discontinuation have been reported by multiple groups and are now in fact already old news.

Speaker Change #129: were they at baseline?

Speaker Change #130: According to IQVIA data, Wegovy had adherence rates of roughly only 41% over a 12-month period, and a recent Blue Cross Blue Shield report suggests that a growing number of patients are not staying on drugs past three months of initial use.

Speaker Change #130: Were they already kind of at steady state or did they just begin?

Stephen Jasper: We've also seen Rivida's real-world registry in Germany having demonstrated through one year of follow-up in an initial cohort substantial and sustained weight loss and blood sugar control in patients living with obesity and type 2 diabetes. We have had a significant expansion of our Revitalized One Pivotal Study Protocol and Potential Coast Control in type 2 diabetes and an award-winning data presentation of our Rajuva Gene Therapy platform at the American Diabetes Association which I will discuss later.

Speaker Change #130: And then I have a follow-up.

Speaker Change #130: Great, great question.

Speaker Change #131: Some have suggested that patients who simply switch to another drug for long-term maintenance.

Speaker Change #131: but more recent data do not support that theory.

Speaker Change #132: A report from Truvetta just last month was the first publication to look at GLP-1 re-initiation within one year of stopping a prior GLP-1.

Speaker Change #133: The group studied nearly 100,000 individuals who initiated a GLP-1 drug between 2018 and 2023 and found that two-thirds of patients stopped taking their GLP-1 for obesity within one year, consistent with earlier reports.

Stephen Jasper: At the same time, we are disappointed in the disconnect between our substantial progress over the last several quarters and our share price. Considering the challenging financial circumstances in the market, we are committed to managing our business with financial discipline, a heightened sense of urgency, and a keen focus on operational execution. We value the support and feedback from our shareholders and would be happy to engage further to discuss our strategy and prospects.

Speaker Change #133: What's new is that they found that only one third of those individuals who stop taking one drug try another drug within one year.

Speaker Change #133: This implies that there's a very high rate of GLP-1 experimentation in the market today.

Speaker Change #133: but also that the majority of patients who stop taking the drug do not start another drug within one year at least.

Stephen Jasper: The management team and I are incredibly optimistic about the near-term prospects for the company, and based on our track record and significant progress made since going public in February, we are confident in our ability to execute upon major upcoming value drivers over the next few quarters, which I am excited to walk through today on our call. As we advance our two platforms, Ravita and Rijuva, we see an opportunity to truly bring an end to obesity by developing and delivering disease-modifying therapies that offer scalable, sustained solutions to the disease.

Speaker Change #133: and therefore are not going to benefit from the drugs that are available long enough to see the benefits that the clinical trials are showing. What's more, there are a large number of individuals who have not yet tried a GLP-1 drug.

Ruby: Broad payer reimbursement has become a key hurdle to unlocking access, and it is clear that expanded coverage will depend on real-world results to demonstrate durable weight loss maintenance, the kind of results that we believe RoVita can offer.

Speaker Change #135: So, it's becoming clear that chronic administration of GLP-1s, combined with potential side effects, high costs, and distribution issues, has resulted in truly abysmal long-term adherence.

Stephen Jasper: We are laser-focused on achieving key upcoming data milestones across both programs that will de-risk our clinical, regulatory, and commercial opportunity. Beginning with Ravita, our Ravita platform is a proprietary device and delivery system that targets the duodenum to reverse pathology and the duodenal lining that is a root cause of obesity and type 2 diabetes. You can think of it as Lasick, but for obesity. Ravita is on a path towards pivotal data in two very large markets with extraordinary unmet need.

Speaker Change #135: The obesity market is in a situation where, having now substantially solved the problem of short-term weight loss, the incredible unmet need in obesity has shifted to the problem of durable weight maintenance.

Speaker Change #135: What is so desperately needed for patients is a reliable and effective off-ramp from GLP-1 drug therapy.

Speaker Change #135: However, innovation in the space by other competitors cannot solve the problem of adherence and is rather therefore focused on a zero sum game of superiority to existing drugs.

Stephen Jasper: The first is weight maintenance after discontinuation of GLP1-based drugs in obesity, and the second target market is glucose control for people with type 2 diabetes who do not want to escalate medical therapy. Obesity is the single most significant opportunity in healthcare today. We know GLP1 drugs have been shown in large clinical trials to be very effective in helping patients achieve weight loss and other cardiometabolic benefits. However, there is considerable debate about how to quantify the true impact these drugs will have on healthcare outcomes in the real world.

Speaker Change #135: All these alternatives are competing against each other for only one piece of the puzzle, which comprises the minority of patients who are willing to comply with a lifelong chronic drug regimen.

Speaker Change #135: It is clear that major players are beginning to pay very close attention to the issues around weight maintenance and the limitations of the drug product form in the treatment of obesity.

Speaker Change #136: We were incredibly proud to share that earlier this month, the FDA recently granted breakthrough device designation for our Rovita system for use in maintaining weight loss after discontinuing GLP-1 drugs.

Stephen Jasper: Why is that? High rates of GLP1 discontinuation have been reported by multiple groups and are now in fact already old news. According to IQVIA data, we gov had adherence rates of roughly only 41% over a 12-month period, and a recent Blue Cross Blue Shield report suggests that a growing number of patients are not staying on drug past three months of initial use. Some have suggested that patients who stop taking one obesity drug will simply switch to another drug for long-term maintenance, but more recent data do not support that theory.

Speaker Change #136: Breakthrough device designation allows for acceleration of development, assessment, and FDA review for premarket approval. We and our scientific advisors believe that this is a momentous event in the field of obesity management.

Speaker Change #136: Because to our knowledge, Rivera is the first and only device developed for obesity to receive breakthrough device designation.

Speaker Change #136: The FDA has clearly specified that weight maintenance is defined as the achievement and maintenance of clinically meaningful weight loss for one year after the discontinuation of therapy.

Speaker Change #136: And despite the development of a range of products for obesity, ranging from peptides to small molecules to antibodies to even siRNA approaches, we are unaware of any other products in development that can come anywhere close to maintaining metabolic benefits for one year after discontinuation.

Stephen Jasper: A report from Truveta just last month was the first publication to look at GLP1 re-initiation within one year of stopping a prior GLP1. The group studied nearly 100,000 individuals who initiated a GLP1 drug between 2018 and 2023 and found that two-thirds of patients stopped taking their GLP1 for obesity within one year consistent with earlier reports. What's new is that they found that only one-third of those individuals who stop taking one drug try another drug within one year.

Stephen Jasper: This implies that there's a very high rate of GLP1 experimentation in the market today, but also that the majority of patients who stop taking the drug do not start another drug within one year at least. And therefore are not going to benefit from the drugs that are available long enough to see the benefits that the clinical trials are showing. What's more, there are a large number of individuals who have not yet tried a GLP1 drug.

Speaker Change #136: So, If you look back at our full analysis from our Rovita clinical studies, what you will observe is a trend towards greater weight loss over time over the period of one year in about 100 patients who are treated and followed in Rovita clinical studies, people with type 2 diabetes. So that, I think, is consistent with what we are seeing here in terms of the profile of weight loss over time.

Speaker Change #137: Our confidence in Revita is validated by what we're seeing in our real-world registry study in Germany, which continues to show impressive clinical results in the first tranche of patients who have achieved one year of follow-up.

Speaker Change #137: And this is a really interesting question.

Speaker Change #137: Why is the weight loss increasing?

Speaker Change #137: You asked about how long people had been on GLP-1s. And I think you've already pointed out that of the 14 patients who were at six months earlier, five of them had been on GLP-1s.

Speaker Change #137: At baseline, prior to Rivida, these 11 patients at a median age of 62 years, median body weight of 111 kilograms, and advanced type 2 diabetes, with an average of 15 years since diagnosis of diabetes.

Speaker Change #137: Of the 11 patients who are now on GLP-1s, I'm sorry, of the 11 patients who are now at one year, exactly four of them were on GLP-1, at the time that they enrolled in the study.

Speaker Change #137: And we understand from the treating physician that they had been on GLP-1s for some period of time, but we really do not have detailed retrospective EMR data to confirm exactly how long they had been on those drugs. However, a couple of them were on Trulicity, and so you could imagine they probably weren't recently put on Trulicity. And so that suggests to me that they've been on the weight loss on their GLP-1s for some length of time. One of these patients switched their GLP-1 from one agent to another during the follow-up period.

Speaker Change #137: Two of them stayed on their GLP-1s throughout the follow-up period. And the other one stopped their GLP-1 during the follow-up period, and then did not resume it through one year of follow-up.

Speaker Change #137: So there's a lot of, in the real world, a lot of medication changes happening for these patients.

Speaker Change #137: And as a doctor who took care of these patients, and as a son of a person with type 2 diabetes, I can tell you, I'm like super sympathetic to the effort required for chronic medical therapy for people with multiple diseases.

Speaker Change #137: Lots of different doctors changing medicines all of the time to address symptoms, side effects, formulary changes, drug-drug interactions, all of the things in the real world that impact a drug's ability to have an effect, or that you don't really see in phase three clinical trials.

Speaker Change #137: Despite all of that, what's kind of surprising is that 10 of the 11 patients have these, have either reductions or stable medicines over a one-year period of time, and yet are seeing profound improvements in weight and in blood sugar control that's just as strong, if not stronger, at one year than it was at one, three, and six months.

Speaker Change #137: Despite using up to three different glucose-lowering medications, patients' type 2 diabetes remained uncontrolled prior to intervention with a median baseline HbA1c of 9.6%, which is quite high.

Speaker Change #137: So that's a positive sign for us, but obviously we'll be continuing to follow more patients.

Roberta: As in prior studies of Revita, a majority of those who enrolled in the study have been men.

Stephen Jasper: Broadpayer reimbursement has become a key hurdle to unlocking access, and it is clear that expanded coverage will depend on real-world results to demonstrate durable weight loss maintenance. The kind of results that we believe Ruby that can offer. So it's becoming clear that chronic administration of GLP1 combined with potential side effects, high costs and distribution issues has resulted in truly abysmal on term adherence. The obesity market is in a situation where having now substantially solved the problem of short term weight loss.

Roberta: These factors, advanced age, advanced type 2 diabetes, predominantly male gender, have all typically been associated with reduced efficacy of drugs to lower weight and blood sugar.

Roberta: And despite the fact that these individuals represent a hard-to-treat patient segment, at 12 months post-Revita, median weight decreased from 111 kilograms.

Roberta: to 97 kilograms, representing nearly 13% total body weight loss.

Roberta: and median HbA1c decreased from 9.6% to 7.2%, which is a substantial improvement in blood sugar control in individuals who had truly poorly controlled disease.

Stephen Jasper: The incredible unmet need in obesity has shifted to the problem of durable weight maintenance. What is so desperately needed for patients is a reliable and effective off-ramp from GLP1 drug therapy. However, innovation in the space by other competitors cannot solve the problem of adherence and is rather therefore focused on a zero sum game of superiority to existing drugs. All these alternatives are competing against each other for only one piece of the puzzle, which comprises the minority of patients who are willing to comply with a lifelong chronic drug regimen.

Roberta: And we have a public presentation and more data coming up in the fall where we can go through a lot more information, including patient level data at various time points and really give a lot more color on what we're seeing with larger numbers of people, which is gonna be important.

Roberta: We will be presenting data in larger numbers of patients at a scientific meeting later this year.

Roberta: Okay, so that kind of preempted my follow-up question to that, it was that...

Roberta: So, data from this real-world registry, while relatively small numbers at one year so far, validate the results that we have seen from pooled analyses of over 100 Ravita clinical trial patients who had previously been followed for a year or more.

Roberta: The data from Germany are a promising indicator, therefore, for our weight maintenance remain one pivotal study, as well as our type 2 diabetes revitalized one pivotal study.

Stephen Jasper: It is clear that major players are beginning to pay very close attention to the issues around weight maintenance and the limitations of the drug product form in the treatment of obesity. We were incredibly proud to share that earlier this month, the FDA recently granted breakthrough device designation for our Ruby to system for use and maintaining weight loss after discontinuing GLP1 drugs. Breakthrough device designation allows for acceleration of development, assessment and FDA review for pre-market approval.

Roberta: We believe the German registry experience also provides important read-through for the potential on-label results Rovita may see in other regions, including the United States, if and when approved.

Stephen Jasper: We and our scientific advisors believe that this is a momentous event in the field of obesity management because, to our knowledge, Ruby is the first and only device developed for obesity to receive breakthrough device designation. The FDA has clearly specified that weight maintenance is defined as the achievement and maintenance of clinically meaningful weight loss for one year after the discontinuation of therapy. Despite the development of a range of products for obesity, ranging from peptides to small molecules to antibodies to even SIRNA approaches, we are unaware of any other products and development that can come anywhere close to maintaining metabolic benefits for one year after discontinuation.

Roberta: What's more, we look ahead to the next several quarters in Germany where Rovita has a CE mark label to treat inadequately controlled type 2 diabetes despite the use of glucose-lowering medications.

Roberta: where we have enthusiastic investigators and patients who are now one year post-rovita leading lives that are generally healthier and less burdened by disease and disease management than before rovita.

Roberta: Because I know in the DDG data cut, free month, there was considerable variability in the weight loss.

Roberta: I was going to ask whether there were any notable baselines, disease state characteristic differences in patients who didn't lose that much.

Roberta: Given the feedback from physicians and patients within the registry, and these remarkable clinical results for patients who would rather live with poorly controlled type 2 diabetes than take another medication, and are opting for Revita to improve their glucose control and to lower weight without needing more medicines,

Roberta: We are gratified to have a waiting list of hospitals and physicians throughout Germany who would like to begin offering rubita for their patients.

Roberta: And we anticipate offering Rovita at additional centers in Germany over the course of the next several quarters, and to turn attention from purely running a registry in the country, to begin to inform and educate patients and physicians to see if Rovita is right for them.

Stephen Jasper: Our confidence in Ruby is validated by what we are seeing in our real-world registry study in Germany which continues to show impressive clinical results in the first tranche of patients who have achieved one year of follow-up. At baseline, prior to Ruby, these 11 patients at a median age of 62 years, median body weight of 111 kilograms, and advanced type 2 diabetes with an average of 15 years since diagnosis of diabetes, diabetes.

Roberta: As we have been ramping up our Remain 1 study for weight maintenance, our focus has been on leveraging centers of excellence with GI endoscopists who are already involved in our revitalized clinical program.

Roberta: In particular, we've developed strong relationships with GI endoscopists who have a specific area of interest in bariatric and metabolic endoscopy, given the critical role of the gut in controlling obesity and metabolic disease.

Stephen Jasper: Despite using up to three different glucose lowering medications patients type to diabetes remained uncontrolled prior to intervention with a median baseline HVA1C of 9.6% which is quite high. As in prior studies of Ravita a majority of those who enrolled in the study have been men. These factors advanced age advanced type to diabetes predominantly male gender have all typically been associated with reduced efficacy of drugs to lower weight and blood sugar. And despite the fact that these individuals represent a hard to treat patient segment at 12 months post-Ravita median weight decrease from 111 kg to 97 kg representing nearly 13% total body weight loss.

Roberta: Something we've been told time and again from doctors is that they have an overwhelming number of patients who are desperate to lose weight and to keep it off. And many bariatric and metabolic focused endoscopists, who we are recruiting for the clinical trials, are already building obesity practices due to high demand for their services.

Roberta: Many of them have a ready pool of patients who are potential Ravita candidates within their own GI groups and a motivation to build these practices to offer additional therapies for a larger number of patients.

Roberta: These GI doctors also have deep relationships with primary care physicians who already refer patients to them, allowing for a natural referral network for patients to be identified and treated in endoscopy centers.

Stephen Jasper: And median HVA1C decrease from 9.6% to 7.2% which is a substantial improvement in blood sugar control in individuals who had truly poorly controlled disease. We will be presenting data in larger numbers of patients at a scientific meeting later this year. So data from this real world registry while relatively small numbers at one year so far validate the results that we have seen from pooled analyses of over 100 Ravita clinical trial patients who had previously been followed for a year or more.

Speaker Change #139: After speaking with these doctors, we are confident that our focus on these highly trained specialists will allow us to build a significant network of physicians who can easily introduce the approximately 40-minute Revita procedure seamlessly into their practice.

Speaker Change #139: Millions of patients with obesity and type 2 diabetes are already seeing gastroenterologists regularly and millions of endoscopies are performed annually for people with obesity and type 2 diabetes.

Speaker Change #139: Of the estimated 20 million endoscopies that are performed each year in the United States, roughly 40% of people, or 8 million endoscopies, are already being performed annually for people with obesity in the U.S.

Stephen Jasper: The data from Germany are a promising indicator therefore for our weight maintenance remain one pivotal study as well as our type 2 diabetes revitalized one pivotal study. We believe the German registry experience also provides important read through for the potential on label results Ravita may see in other regions including the United States if and when approved. What's more we look ahead to the next several quarters in Germany where Ravita has a CE mark label to treat inadequately controlled type 2 diabetes despite the use of glucose lowering medications where we have enthusiastic investigators and patients who are now one year post-Ravita leading lives that are generally healthier and less burdened by disease and disease management than before Ravita.

Speaker Change #139: So, these patients are already coming to endoscopy, already getting procedures, and Revita is purpose-built to fit into this high-volume, highly scalable workflow.

Speaker Change #139: What this allows is a targeted and efficient commercial model that would allow us to focus on bariatric and metabolic endoscopists to help build on their existing practices to offer Revita for potential indications that they cannot currently offer today.

Speaker Change #139: This is not the same approach as prescribing an oral or injectable agent for weight loss.

Speaker Change #139: but we do believe this is a highly attractive therapeutic alternative to the clearly very large segment of patients who are looking for a durable weight loss solution without being on chronic drug therapy.

Stephen Jasper: Given the feedback from positions and patients within the registry and these remarkable clinical results for patients who would rather live with poorly controlled type 2 diabetes than take another medication and are opting for Ravita to improve their glucose control and to lower weight without needing more medicines. We are gratified to have a waiting list of hospitals and physicians throughout Germany who would like to begin offering Ravita for their patients and we anticipate offering Ravita at additional centers in Germany over the course of the next several quarters and to turn a tent from purely running a registry in the country to begin to inform and educate patients and physicians to see if Ravita is right for them.

Speaker Change #139: We look forward to speaking more about our targeted and efficient commercial model and the path forward to that in future quarters.

Speaker Change #139: If you can't comment now, I'll just wait until later on.

Speaker Change #139: Yeah, I think we'll wait till later on in the year.

Speaker Change #139: Back to Rovita Clinical Development.

Speaker Change #140: As you'll remember, Remain 1 is our pivotal study for weight maintenance after GLP-1 drug discontinuation in obesity.

Speaker Change #140: But I don't think we're seeing anything that's different than what other obesity drugs are showing in terms of a waterfall plot of weight over time.

Speaker Change #140: But we will go into that in more detail later in the year.

Speaker Change #140: Having obtained FDA IDE approval for this study at the end of Q1, we are pleased to report that we have now initiated the study and are actively enrolling at several centers in the United States.

Speaker Change #140: Thank you.

Speaker Change #140: And then my follow-up question is on, it's actually a clarification question on REJUVA, regard...

Speaker Change #140: Seminole.

Speaker Change #140: We see incredible enthusiasm from physicians and patients.

Speaker Change #140: BC data that was presented at AD.

Speaker Change #140: And my question, was the semaglutide dose received in mouse, what was the equivalent human dose of that? Well, in order to be consistent to the dbdb data that we had generated earlier, we chose exactly the same dose per kilogram in the mice that we had used in the earlier dbdb studies, which was the maximum glucose-lowering drug concentration seen in somaglutide in those mice. So, it would be equivalent to the top dose of what's prescribed for type 2 diabetes in those mice.

Speaker Change #140: as we begin to ramp up study enrollment and we anticipate reporting a midpoint data analysis in the second quarter of 2025, which will evaluate approximately 45 patients who have been randomized and followed for 12 weeks post-treatment with Revita or Sham.

Stephen Jasper: As we have been ramping up our remain one study for weight maintenance our focus has been on leveraging centers of excellence with GI endoscopists who are already involved in our revitalized clinical program. In particular we've developed strong relationships with GI endoscopists who have a specific area of interest in bariatric and metabolic endoscopy given the critical role of the gut in controlling obesity and metabolic disease. [inaudible] Drugs. We anticipate reporting early data from the Reveal 1 Open Label Covert in the fourth quarter of 2024.

Speaker Change #140: Okay.

Speaker Change #140: Thank you.

Speaker Change #140: Just one really quick follow-up question.

Speaker Change #140: These are patients who were not previously on trizepatide who will be achieving 15% total body weight loss and then trizepatide will be discontinued and they will be randomized and then followed for 12 weeks.

Speaker Change #140: In parallel, we are beginning to enroll patients in our Open Label Reveal 1 cohort for people who are already on a GLP-1 drug and looking for an off-ramp to keep the weight off after stopping these drugs.

Speaker Change #140: We anticipate reporting early data from the Reveal-1 Open Label cohort in the fourth quarter of 2024. Both Remain-1 and Reveal-1 underscore our important commitment to this area of weight maintenance after GLP-1 discontinuation.

Speaker Change #140: Turning toward Ruvita for type 2 diabetes.

Speaker Change #140: Our goal with Revitalize I is to establish Revita as a safe, effective, and straightforward treatment alternative to medication escalation for patients with type 2 diabetes.

Speaker Change #140: As we are beginning to see in Germany, we believe patients may choose this as early as second line or as an alternative to initiating injectables or insulin or escalating insulin therapy.

Speaker Change #140: The common factor influencing patient behavior is a desire to have better disease control while avoiding medication escalation.

Speaker Change #140: In June, we announced our plans to significantly expand our Revitalize 1 pivotal study of Rovita to include patients with type 2 diabetes who are inadequately controlled on any glucose-lowering agent including GLP-1s and or insulin, thereby expanding our potential U.S. treatment population by about six-fold.

Speaker Change #140: We continue to enroll this study and anticipate reporting top-line data in mid-2025.

Speaker Change #140: For the REJUVA obesity construct, which is still yet to be.., nominated, in addition to the human GLP-1 promoter that will presumably be included in this construct, speak to any updates as to what you're thinking of in terms of additional mechanisms that this contract might include and whether adding those additional mechanisms may kind of offset or mitigate the activity or efficacy of the original contract.

Speaker Change #140: You know, one of the challenges that we have here is an abundance of riches.

Speaker Change #140: Finally, we wanted to turn to our nutrient responsive GLP-1 gene therapy platform, REJUVA.

Speaker Change #140: Candidly, all of these metabolic hormones are small peptides. They can be put together combinatorially or they can be acting independently.

Speaker Change #140: We continue to generate preclinical data that excites the scientific and medical community for the potential game-changing nature of this platform.

Speaker Change #140: For instance, you could imagine a GLP-1 alone, or you could imagine a GIP-GLP-1 combination, or you could imagine an amylin alone, or any combination thereof.

Speaker Change #140: We have shared new head-to-head preclinical data comparing REJUVA to semaglutide, which demonstrated that treatment with REJUVA yielded robust and durable weight loss in mice with diet-induced obesity and also enabled sustained weight maintenance following semaglutide withdrawal.

Speaker Change #140: So, there's a lot of potential variables to work through, and so we are liking what we're seeing with GLP-1 alone.

Speaker Change #140: We're also liking what we're seeing in GIP and GLP-1 combinations, and we think that this platform that leverages the Human Insulin Promoter can have potential, a lot of optionality to it, and we're working through some of that.

Speaker Change #141: Importantly, mice treated with Rejuva demonstrated a greater relative proportion of loss of fat mass to lean mass than those treated with semaglutide, and this has been flagged, as you know, as a significant potential risk with currently approved GLP-1 drugs.

Speaker Change #141: With these exciting accomplishments, we are now gearing up for a catalyst-rich second half of 2024, including key inflection points across both platforms.

Speaker Change #141: In REVITA, we will have initial data from the REVEAL1 open label cohort in weight maintenance by the end of the year, in addition to ongoing updates from our Germany real-world registry data impacting REVITA's potential in both obesity and in type 2 diabetes.

Speaker Change #141: In REJUVA, we anticipate completing IND-enabling studies for REJUVA-1, our first candidate targeting type 2 diabetes, as well as additional data presentations on the REJUVA GLP-1 platform and major scientific congresses in the second half of the year.

Speaker Change #141: And when we nominate the candidate, we'll explain to you our rationale for why we chose what we chose, but just know that we are thinking through all of the possibilities here in order to choose the best path from a clinical regulatory perspective with a principal focus on ensuring that what we're doing is going to be safe for the population that we're treating.

Speaker Change #141: We will also be nominating our second candidate, Rejuva 2, for obesity in the second half of the year.

Speaker Change #141: And I think that has to be the first objective for this therapy, because the efficacy signal that we're seeing in terms of obesity with GLP-1 alone is already very, very meaningful in the preclinical models.

Speaker Change #141: We are very excited with the progress our team has made and the near-term data we plan to share across both programs, which we believe will reinforce our leadership position in addressing the massive unmet need in obesity to offer sustained solutions for obesity and metabolic disease.

Speaker Change #141: So if we're going to add other mechanisms in, we're going to have to be thoughtful about the trade-off between what we already know and what we still have to learn.

Speaker Change #142: And before I pass the call over to Lisa, I also want to provide another business update.

Speaker Change #142: We'll tell you more later this week.

Speaker Change #143: Allen Will, our longtime chair of the board, has decided to step down from our board after 12 years of distinguished service.

Stephen Jasper: Both remain one and reveal one underscore our important commitment to this area of weight maintenance after GLP1 discontinuation. Turning toward Reveeda for Type 2 Diabetes. Our goal with Revitalized 1 is to establish Reveeda as a safe, effective and straightforward treatment alternative to medication escalation for patients with Type 2 Diabetes. As we are beginning to see in Germany, we believe patients may choose this as early as second line or as an alternative to initiating injectables or insulin or escalating insulin therapy.

Speaker Change #143: And thanks so much for taking my questions again, congrats.

Speaker Change #144: We are fortunate to have benefited from Alan's guidance as chair over these last 12 years. His leadership helped us to grow from an early stage research company to a public company with two pivotal studies in two major disease categories and an exciting gene therapy pipeline.

Speaker Change #144: Thank you very much.

Speaker Change #144: We are grateful for his years of service and we wish him the very best.

Speaker Change #145: Alan will serve as an advisor to Ajay Royan who has been appointed as a new chair of the board.

Speaker Change #145: Now, in order to wrap up.

Speaker Change #145: Um, I want to thank everyone for joining us this afternoon.

Speaker Change #146: I am pleased that Ajay will step in as chair during this critical inflection point for Fractal. His passion, extensive experience, and strategic vision will be invaluable as we accelerate development of our products towards potential regulatory, approval, and commercialization.

Stephen Jasper: The common factor influencing patient behavior is that the desire to have better disease control while avoiding medication escalation. In June, we announced our plans to significantly expand our Revitalized 1 Pivotal Study of Reveeda to include patients with Type 2 Diabetes who are inadequately controlled on any glucose lowering agent including GLP1s and or insulin, thereby expanding our potential US treatment population by about sixfold. We continue to enroll the study and anticipate reporting top line data in mid 2025.

Speaker Change #146: With that, I will now turn the call to Lisa to provide an update on our second quarter financials. Lisa?

Lisa Davidson: Thank you, Harith. In the second quarter of 2024, revenue was generated from our commercial pilot in Germany and enabled patients to enroll in the German Railroad Registry Study.

Lisa Davidson: Turning to Operating Expenses

Stephen Jasper: Finally, we wanted to turn to our nutrient response of GLP1 gene therapy platform, Rajuva. We continue to generate pre-clinical data that excites the scientific and medical community for the potential game-changing nature of this platform. We have shared new head-to-head pre-clinical data comparing Rajuva to Samagletide, which demonstrated that treatment with Rajuva yielded robust and durable weight loss in mice with diet-induced obesity and also enabled sustained weight maintenance following Samagletide withdrawal. Importantly, mice treated with Rajuva demonstrated a greater relative proportion of loss of fat mass to lean mass than those treated with Samagletide, and this has been flagged, as you know, as a significant potential risk with currently improved GLP1 drugs.

Speaker Change #147: Research and development expense in the second quarter of 2024 were $16.8 million compared to $9.1 million for the same period in 2023.

Speaker Change #147: The increase during the quarter was primarily due to the initiation of the Remain-1 study, the progress made in the Revitalize-1 study, and continued development of the REJUVA program, as well as increased personal-related expenses, including stock-based compensation.

Speaker Change #147: Selling General and Administrative Expense in the second quarter of 2024 was $6.2 million compared to $2.8 million in the same period in 2023.

Speaker Change #147: The increase was primarily due to professional service expenses and other costs associated with operating the publicly traded company.

Speaker Change #147: and increased personnel-related expenses, including stock-based compensation.

Stephen Jasper: With these exciting accomplishments, we are now gearing up for a catalyst-rich second half of 2024, including key inflection points across both platforms. In Ravita, we will have initial data from the Raviyal 1 Open Label cohort in weight maintenance by the end of the year, in addition to ongoing updates from our Germany real-world registry data, impacting Ravita's potential in both obesity and in type 2 diabetes. In Rajuva, we anticipate completing IND enabling studies for Rajuva 1, our first candidate targeting type 2 diabetes, as well as additional data presentations on the Rajuva GLP1 platform and major scientific congresses in the second half of the year.

Speaker Change #147: For the second quarter of 2024, we reported a net loss of $17.2 million, compared to a net loss of $30.2 million for the same period in 2023.

Speaker Change #147: The decrease in net loss was primarily attributed to the non-cash change in fair value of notes payable and warrant liabilities, as well as increased interest income offset by the increase in operating expenses.

Speaker Change #147: As of June 30, 2024, we had cash and cash equivalent of $102.4 million.

Speaker Change #148: Based on our current development plans, we believe cash and cash equivalents will be sufficient to fund our operations through expected key company milestones into Q4 2025. I will now turn the call back to Harit.

Stephen Jasper: We will also be nominating our second candidate, Rajuva 2, for obesity in the second half of the year. We are very excited with the progress our team has made, and the near-term data we plan to share across both programs, which we believe will reinforce our leadership position in addressing the massive unmet need in obesity to offer sustained solutions for obesity and metabolic disease. And before I pass the call over to Lisa, I also want to provide another business update.

Speaker Change #148: We appreciate your continued interest and your support, and we look forward to continuing to share updates on our progress as we seek to change the landscape of obesity and type 2 diabetes.

her eaves: Thank you, Lisa. As you can see, we've made significant progress over the last quarter to take advantage of our unique opportunity to become an industry leader in weight maintenance.

Speaker Change #150: While there seems to be a new drug targeting obesity every month that promises improved tolerability or a new mechanism, the truth remains that they are all seeking to tackle the obesity epidemic in the same way, through chronic administration, which is simply not sustainable for most people.

Stephen Jasper: Alan Will, our longtime chair of the board, has decided to step down from our board after 12 years of distinguished service. We are fortunate to have benefited from Alan's guidance as chair over these last 12 years. His leadership helped us to grow from an early-stage research company to a public company with two pivotal studies in two major disease categories and an exciting gene therapy. Pipeline. We are grateful for his years of service and we wish him the very best.

Speaker Change #150: Thank you so much.

Speaker Change #151: At Fractyl, our goal is to provide solutions that free people from the burden of obesity and metabolic disease through sustainable solutions that have lasting benefits and do not depend on long-term adherence.

Speaker Change #151: As we enter the second half of 2024, we have several key clinical and pre-clinical milestones that have the potential to help us realize our vision of delivering durable, disease-modifying therapies to patients suffering from metabolic disease.

Stephen Jasper: Alan will serve as an advisor to Ajay Royan who has been appointed as a new chair of the board. I am pleased that Ajay will step in as chair during this critical inflection point for Fractyl, his passion, extensive experience and strategic vision will be invaluable as we accelerate development of our products towards potential regulatory approval and commercialization.

Speaker Change #151: I would like to take this opportunity to thank the patients and physicians who continue to put their trust in us and our products.

Speaker Change #151: the employees at Fractal who are laser-focused on delivering life-changing therapies, and you, our shareholders. We are grateful for your support and more optimistic than ever before about our prospects to deliver on our promises.

Speaker Change #151: Talk soon.

Harry: With that, I will now turn the call to Lisa to provide an update on our second quarter of financials. Lisa? Thank you, Harry. In the second quarter of 2024, revenue was generated from our commercial pilot in Germany and enabled patients to enroll in the German real-world registry study. Turning to operating expenses, research and development expense in the second quarter of 2024 were 16.8 million compared to 9.1 million for the same period in 2023.

Speaker Change #151: This concludes today's conference call.

Speaker Change #152: And with that, we will now open the call up for questions. Thank you very much.

Speaker Change #152: Thank you for participating.

Speaker Change #152: i

Speaker Change #153: As a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the question queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster.

Speaker Change #153: You may now disconnect.

Speaker Change #153: Good afternoon and welcome to Fractyl Health's second quarter financial results and business updates call.

Speaker Change #153: As a reminder, this conference call is being recorded.

Speaker Change #154: Our first question.

Speaker Change #154: Comes from the line of Jason Gerberry of B of A.

Speaker Change #154: At this time, all participants are in a listen-only mode.

Harry: The increase in the quarter of 2024 was primarily due to the initiation of the Remain One Study, the progress made in the Revitalized One Study and continued development of the Reduver Program, as well as increased personal related expenses, including stock-based compensation. Selling general and administrative expense in the second quarter of 2024 was 6.2 million compared to 2.8 million in the same period in 2023. The increase was primarily due to professional service expenses and other costs associated with operating the publicly traded company and increased personal related expenses, including stock-based compensation.

Speaker Change #155: Oh, hi. This is Chi on for Jason this afternoon. Thanks for all the updates and thanks for taking our questions.

Speaker Change #156: We have two questions, maybe the first one on Bravita, given you have some data coming out from the WV-1 open label data in fourth quarter.

Speaker Change #157: I'm hoping that you can maybe provide a little bit more color on your expectation for the open-labeled data in 4Q. How large might the sample size be, and would you expect the follow-up to be sufficiently long enough?

Speaker Change #158: to get an initial read on the efficacy and weight maintenance.

Harry: For the second quarter of 2024, we reported a net loss of 17.2 million compared to a net loss of 30.2 million for the same period in 2023. The decrease in that loss was primarily attributed to the non-cash change in fair value of notes payable and warrant liabilities, as well as increased interest income, offset by the increase in operating expenses. As of June 30, 2024, we had cash and cash equivalent of 102.4 million.

Speaker Change #159: And looking more broadly into next year, you will also have some control data from the remaining one study in second quarter 25.

Speaker Change #160: Hoping you can provide some color to discuss how might the initial Review-1 data help inform the Revita's therapeutic potential ahead of the bigger second quarter 25 update and then ask for a follow-up after this.

Speaker Change #160: There will be a Q&A session following management's prepared remarks.

Speaker Change #161: Great. Thank you, Chi. Appreciate the question.

Harry: Based on our current development plans, we believe cash and cash equivalents will be sufficient to fund our operations through expected key company milestones into Q4 2025. I will now turn the call back to Harifa. Thank you, Lisa. As you can see, we've made significant progress over the last quarter to take advantage of our unique opportunity to become an industry leader in weight maintenance. While there seems to be a new drug targeting obesity every month that promises improved tolerability or a new mechanism, the truth remains that they are all seeking to tackle the obesity epidemic in the same way through chronic administration, which is simply not sustainable for most people.

Speaker Change #161: I will now turn the call over to Steven Jasper.

Speaker Change #161: Um...

Speaker Change #162: Everyone knows we're really excited about the Remain Pivotal study. It has two arms. One of them is the reveal one arm for people who are already on GLP-1s and looking for an off-ramp.

Speaker Change #162: Steven, you may now begin.

Speaker Change #162: Thank you.

Speaker Change #163: And that will be an open-label study wherein we will be enrolling subjects who are currently taking either semaglutide or trazepatide and we'll be discontinuing the therapy immediately before giving them a...

Speaker Change #163: giving them Revita. We anticipate that within four to eight weeks

Speaker Change #163: patients will have

Speaker Change #163: a increase in hunger and will have steadily increasing weight.

Harry: At Prattal, our goal is to provide solutions that free people from the burden of obesity and metabolic disease through sustainable solutions that have lasting benefits and do not depend on long-term adherence. As we enter the second half of 2024, we have several key clinical and pre-clinical milestones that have the potential to help us realize our vision of delivering durable disease modifying therapies to patient suffering from metabolic disease. I would like to take this opportunity to thank the patients and physicians who continue to put their trust in us and our products, the employees at Fractyl who are laser-focused on delivering life-changing therapies, and you are shareholders. We are grateful for your support and more optimistic than ever before about our prospects deliver on our promises.

Speaker Change #163: regain if they do not benefit from the therapy because that is what we have seen from studies of semaglutide withdrawal or terzapatide withdrawal in the in the randomized trials that they have that they have presented but also in routine clinical practice.

Speaker Change #163: 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.

Speaker Change #163: Joining us on the call today are Dr. Harith Rajagopalan, Chief Executive Officer, and Lisa Davidson, Chief Financial Officer.

Speaker Change #163: We're giving patients digital scales that will allow us to get daily readings on what their weights are and we'll be getting

Speaker Change #163: 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 milestone, preclinical or clinical trial data.

Speaker Change #163: them to come into the clinic at week 4 and then again at week 12. And we're going to have data from the first 10 patients.

Speaker Change #163: The impact of any of our product candidates, the design initiation, timing, and results of clinical enrollment in any clinical trial or readout, The potential launch or commercialization of any of our product candidates or products, 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 Act of 1995.

Speaker Change #163: Such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Actual results could differ materially from those indicated by the forward-looking statements due to the impact of risk, uncertainties, and other important factors.

Speaker Change #163: Participants are directed to the risk factors set forth in Fractyl's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2024, and the company's other filings with the SEC.

Speaker Change #163: Any forward-looking statements made today speak only to Fractyl's operations as of today.

Speaker Change #163: Fractyl disclaims any duty to provide updates to its overlooking statements, even if subsequent events cut the company's views to change.

Speaker Change #163: It is now my pleasure to pass the call over to Harita.

Speaker Change #163: emerging at the end of the year, and we anticipate enrolling a total of 20 patients in this open-label study, so we'll have accruing data into Q1 of 2025. I do believe that if Revita is helping

Harry: And with that, we will now open the call-up for questions. Thank you very much. As a reminder to ask a question, you will need to press Star 1-1 on your telephone to remove yourself from the question you may press Star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jason Gerberi, a B of A. Oh, hi, this is P for Jason, this afternoon, thanks for all the updates and thanks for taking up the questions.

Speaker Change #163: to preserve weight loss in these individuals, you're going to begin to see that very soon after they stop their GLP-1. You're going to see that based on how hungry they feel. You're going to see that based on how their weight trajectories look. And I do believe that that will be predictive, as is the German registry data of what we might expect to see in terms of the ability to sustain a lower weight for a prolonged period of time.

Speaker Change #163: Thank you, Stephen, and good afternoon, everyone.

Speaker Change #163: Thank you for joining us on today's call.

Speaker Change #164: Now, turning to your question about the Remain midpoint data analysis.

Speaker Change #165: We have heard from players in the space.

Speaker Change #165: I'm proud of the progress we've made in the past quarter at Fractyl Health as we continue to deliver on our promise to develop transformative therapies that can prevent and reverse metabolic disease. Several recent achievements underscore the potential of our platform.

Speaker Change #166: that control data would be valuable in order to be able to de-risk the clinical and regulatory opportunity for

Speaker Change #166: In the past quarter, we have seen the FDA has awarded Revita a breakthrough device designation for weight maintenance after GLP-1 drug discontinuation. We've also seen Revita's real-world registry in Germany, having demonstrated through one year of follow-up in an initial cohort, substantial and sustained weight loss and blood sugar control in patients living with obesity and type 2 diabetes.

Harry: We have two questions, maybe the first one on Reveeda, given you have some data coming out from the BV1 Open Label Data Info-Porter, hoping that you can maybe provide a little bit more color on your expectation for the Open Label Data Info-Q. How large might the sample size be, and would you expect it to follow up to be sufficiently long enough to get an initial read on the efficacy and weight maintenance.

Speaker Change #166: Revita in weight maintenance and so we have built into the study a plan to do an interim sorry a midpoint analysis of 45 subjects at 12 weeks of follow-up.

Speaker Change #166: We have had a significant expansion of our Revitalize One pivotal study protocol and potential patient population for Revita for glucose control in type 2 diabetes, and an award-winning data presentation of our REJUVA gene therapy platform at the American Diabetes Association, which I will discuss later.

Speaker Change #166: At the same time, we are disappointed in the disconnect between our substantial progress over the last several quarters and our share price.

Speaker Change #166: Considering the challenging financial circumstances in the market, we are committed to managing our business with financial discipline, a heightened sense of urgency, and a keen focus on operational execution.

Speaker Change #166: We value the support and feedback from our shareholders and would be happy to engage further to discuss our strategy and process.

Speaker Change #166: The management team and I are incredibly optimistic about the near-term prospects for the company and based on our track record and significant progress made since going public in February, we are confident in our ability to execute upon major upcoming value drivers over the next few quarters, which I am excited to walk through today on our call.

Speaker Change #166: wherein there will be a two-to-one randomization between Revita and Sham. So the basic question is, what does the trajectory of weight regain look like in the Revita arm versus the Sham arm over that 12-week period of time? And are we beginning to see that there is a separation between the two groups?

Speaker Change #166: As we advance our two platforms, Revita and Rejuva, we see an opportunity to truly bring an end to obesity by developing and delivering disease-modifying therapies that offer scalable, sustained solutions to the disease.

Speaker Change #166: We are laser-focused on achieving key upcoming data milestones across both programs that will de-risk our clinical, regulatory, and commercial opportunity, beginning with Revita.

Speaker Change #166: 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.

Harry: And looking more broadly into next year, you will also have some control data from the Reveeda one study in second quarter, 25, hoping you can provide some color to discuss how might the initial review, one data, help inform the Reveeda therapeutic potential ahead of the bigger second quarter, 25th update, and then I will follow up after this. Great, thank you to you appreciate the question. As everyone knows, we are really excited about the Remain Pivotal Study, it has two arms.

Speaker Change #166: that would enable us to predict the likelihood of success in achieving our primary endpoint, efficacy endpoint, at 24 weeks.

Speaker Change #166: And that's the data that we will begin to present in Q2, and you can obviously imagine that we'll be continuing to follow those patients, and we'll give you data updates into the back half of Q25 as well.

Speaker Change #166: Bye.

Speaker Change #167: Got it. Before I move to my second question, I just want to confirm your fourth quarter data, you said you expect maybe somewhere around 10 patients' worth of data. Will they have, say, four weeks of follow-up so that you can get an initial week on the efficacy and weight maintenance? Or would that

Harry: One of them is the Reveal One Arm for people who are already on GLP1s and looking for an off-fram, and that will be an Open Label Study wherein we will be enrolling subjects who are currently taking either somagletide or Terzepatide, and will be discontinuing the therapy immediately before giving them a Reveeda. We anticipate that within four to eight weeks, patients will have an increase in hunger, and will have steadily increasing weight regain if they do not benefit from the therapy, because that is what we have seen from studies of somagletide withdrawal or Terzepatide withdrawal in the randomized trials that they have presented, but also in routine clinical practice.

Speaker Change #168: Um, you know, would you expect to follow patients longer? Maybe sometime in the 25 before you can get a read of the meeting that we maintenance therapeutic potential.

Speaker Change #169: I think you're going to start to get a signal with those 10 patients at least at four weeks in terms of their clinic visit, but we're also planning to have digital scales that will give us a more real-time read on how these patients are doing.

Speaker Change #169: You can think of it as LASIK, but for obese...

Speaker Change #169: however long they've been followed after the procedure, and the beautiful thing about this is you're just going to see those curves and see how they're beginning to play out over time. We'll have to compare that to what you would expect with terzepatide withdrawal from the terzepatide surmount floor study.

Speaker Change #169: Revita is on a path towards pivotal data in two very large markets with extraordinary unmet need.

Speaker Change #169: The first is weight maintenance after discontinuation of GLP-1-based drugs in obesity, and the second target market is glucose control for people with type 2 diabetes who do not want to escalate medical therapy.

Speaker Change #169: Obesity is the single most significant opportunity in health care today. We know GLP-1 drugs have been shown in large clinical trials to be very effective in helping patients achieve weight loss and other cardiometabolic benefits.

Speaker Change #169: Why is that?

Speaker Change #169: However, there is considerable debate about how to quantify the true impact these drugs will have on health care outcomes in the real world.

Speaker Change #169: Higher rates of GLP-1 discontinuation have been reported by multiple groups and are now, in fact, already old news.

Speaker Change #169: According to IQVIA data, Wegovy had adherence rates of roughly only 41% over a 12-month period, and a recent Blue Cross Blue Shield report suggests that a growing number of patients are not staying on drugs past three months of initial use.

Speaker Change #170: Got it. Thanks. And maybe moving on to my second question on REJUVA, Euclid-1 gene therapy.

Speaker Change #171: I'm curious, can you provide a bit more color on how close you are to completing the IND enabling work?

Harry: We are giving patients digital scales that will allow us to get daily readings on what their weights are, and we will be getting them to come into the clinic at week four and then again at week 12, and we are going to have data from the first ten patients emerging at the end of the year, and we anticipate enrolling a total of 20 patients in this Open Label Study, so we will have accruing data into Q1 of 2025. I do believe that if Reveeda is helping preserve weight loss in these individuals, you are going to begin to see that very soon after they stop their GLP1.

Speaker Change #171: Um...

Speaker Change #172: Do you expect the regulatory hurdle for at least for clinical trial initiation to be pretty straightforward based on conversations you may have already had with the regulator or regulators?

Speaker Change #173: And given your plan to initiate a first in human study, first half next year, curious when my investor can expect to see initial human data for the REJUVA program. Thanks so much.

Chi: Yeah. Great question, Chi.

Speaker Change #174: We have met with regulators in Europe to discuss our Rijuva I preclinical development and we have alignment with them on the preclinical animal models to be used.

Harry: You are going to see that based on how hungry they feel. You are going to see that based on how their weight trajectories look, and I do believe that that will be predictive, as is the German registry data of what we might expect to see in terms of the ability to sustain a lower weight for a prolonged period of time. Now, turning to your question about the remain midpoint data analysis. We have heard from players in the space that controlled data would be valuable in order to be able to de-risk the clinical and regulatory opportunity for Reveeda in weight maintenance, and so we have built into the study, a midpoint analysis of 45 subjects at 12 weeks of follow-up.

Speaker Change #175: which are the DBDV mice and the Yucatan pig, small animal model for efficacy, large animal model for safety toxicology because it mimics the human route of administration.

Speaker Change #175: We already have extensive experience and have already shown data on all of the above with REJUVA001 candidates and are working our way through the same with our development candidate itself.

Speaker Change #175: We've also come to an alignment with regulators about the types of biodistribution studies that need to be completed.

Harry: Health, wherein there will be a two-to-one randomization between Revita and Sham. So the basic question is, what does the trajectory of weight regain look like in the Revita arm versus the Sham arm over that 12-week period of time? And are we beginning to see that there is a separation between the two groups that would enable us to predict the likelihood of success in achieving our primary end point, efficacy end point, at 24 weeks?

Speaker Change #175: The patient population being individuals who are inadequately controlled with type 2 diabetes, who are already on a GLP-1 drug therapy, and are

Speaker Change #175: able to benefit from it and tolerate it in order to be able to de-risk both the safety and the potential efficacy of the REJUVA-1 candidate in that type 2 diabetes patient population. So we have alignment on all of those things. I do think that we have...

Harry: And that's the data that we will begin to present in Q2, and you can obviously imagine that we'll be continuing to follow those patients, and we'll give you data updates into the back half of 25 as well. Data, before I move to my second question, I just want to confirm if your fourth quarter data is said you expect maybe somewhere around 10 patients will put data, would they have say four-week of follow-ups so that you can get an initial week on the efficacy and weight maintenance or would that, would you expect to follow patients longer, maybe sometime in the 25 before you can get a weight maintenance and therapeutic potential?

Speaker Change #176: some work to do to finalize the CMC requirements and we will be working to regain greater clarity on that in the second half of 2024 and that will be the major next step before we feel like we're ready to file for a First In Human Study.

Speaker Change #177: Oh, great. Um, so, um, do you talk about, you know, do you have any expectation for any, uh, the timing for initial human data? Do you expect maybe some in preliminary safety data and second up 25 or too early to tell at this point?

Harry: I think you're going to start to get a signal with those 10 patients at least at four weeks in terms of their clinic visit, but we're also planning to have digital scales that will give us a more real-time read on how these patients are doing over the however long they've been followed after the procedure. And the beautiful thing about this is you're just going to see those curves and see how they're beginning to play out over time.

Speaker Change #178: We do expect that, you know, I think that you're going to get some, the safety that you're going to be looking to pay attention to here is.

Speaker Change #179: is the procedure itself causing any injury and we are feeling confident that it won't based on our extensive experience in preclinical models because of our experts who have been advising us in the development of this technique. Nevertheless, that should be an early signal.

Harry: We'll have to compare that to what you would expect with terseptite withdrawal from the terseptite surmount for study. Got it. Thanks. And maybe moving on to my second question on Rejuve Euclid-1 gene therapy, I'm curious, can you provide the more color on how close you are to completing the IND and labeling work? Do you expect the regulatory hurdle for at least for clinical trial initiation to be pretty strict or based on conversations you may have already had with the regulator or regulators?

Speaker Change #179: And then you're going to be wondering about the safety of the AAV itself.

Speaker Change #179: that's usually a question that emerges over a four to six week period of time immediately after the intervention.

Speaker Change #179: but the questions around the efficacy and safety of the GLP-1, as you know from other gene therapies, will take weeks to months and I think that that's going to be a question that we're going to begin to be able to answer in the back half of 25.

Speaker Change #180: Great, thanks so much for all the color looks like a lot of different data updates for various across your pipeline portfolio next 12 months, and we look forward to seeing those updates evolved.

Harry: And given your plan to initiate a first in human study, first half next year, curious when my investor can expect to see in racial human data for the Rejuve Euclid-1 program. Thanks so much. Yeah, great question, Chi. I think that we have met with regulators in Europe to discuss our Rejuve Euclid-1 preclinical development, and we have alignment with them on the preclinical animal models to be used, which are the DBDV mice and the Eucatan pig, small animal model for efficacy, large animal model for safety, toxicology because it mimics the human route of administration.

Speaker Change #180: Great. Thank you so much.

Speaker Change #180: Thank you.

Speaker Change #181: Our next question comes from the line of Michael of Morgan Stanley.

Michael: Hey guys, thanks for taking the question. Maybe just to follow up on some of the earlier questions related to obesity.

Michael: Some have suggested that patients who stop taking one obesity drug will simply switch to another drug for long-term maintenance.

Michael: But more recent data do not support that theory.

Mike: I'm not sure how much you can comment here, but just if you could talk about the early rate of enrollment in Remain and just maybe how that's tracking versus your expectations. Thanks. Hi, Mike. We started enrolling earlier this...

Mike: A report from Truveta just last month was the first publication to look at GLP-1 re-initiation within one year of stopping a prior GLP-1. The group studied nearly 100,000 individuals who initiated a GLP-1 drug between 2018 and 2023 and found that two-thirds of patients stopped taking their GLP-1 for obesity within one year, consistent with earlier reports.

Harry: We already have extensive experience and have already shown data on all of the above with Rejuve Euclid-0-0-1 candidates and are working our way through the same with our development candidate itself. We do, we've also come to an alignment with regulators about the types of bi-distribution studies that need to be completed. And the patient population being individuals who are inadequately controlled with type 2 diabetes, who are already on a GLP-1 drug therapy and are able to benefit from it and tolerate it in order to be able to de-risk both the safety and the potential efficacy of the Rejuve Euclid-1 candidate in that type 2 diabetes patient population.

Mike: earlier this month.

Speaker Change #183: We just announced it today. What we are seeing is that there's a lot of interest and enthusiasm, there's a bunch of patients who are lining up in the first centers to come in. This is consistent with what other people see in obesity trials, which tend to enroll five times as rapidly as some other studies. And so we're feeling encouraged.

Speaker Change #183: What's new is that they found that only one-third of those individuals who stop taking one drug try another drug within one year.

Speaker Change #183: But it's still very early days, and we'd be happy to update you later on in the year as it progresses, and we have a few more data points that we can call upon.

Speaker Change #183: Yep, makes sense.

Speaker Change #184: Are you seeing more, are you seeing faster enrollment maybe in...

Speaker Change #185: In the reveal sort of.

Harry: So we have alignment on all of those things. I do think that we have Some work to do to finalize the CMC requirements and we will be working to gain greater clarity on that in the second half of 2024. And that will be the major next step before we feel like we're ready to file for a person human study. Great. Um, so do you talk about, you know, do you have any expectations for any, the timing for initial human data?

Speaker Change #186: You know, open label cohort versus remain, you know, just because patients will have the opportunity to get on a GLP one first.

Speaker Change #186: This implies that there's a very high rate of GLP-1 experimentation in the market today, but also that the majority of patients who stop taking the drug do not start another drug within one year at least, and therefore are not going to benefit from the drugs that are available long enough to see the benefits that the clinical trials are showing.

Speaker Change #186: What's more, there are a large number of individuals who have not yet tried a GLP-1 drug.

Speaker Change #186: Broad payer reimbursement has become a key hurdle to unlocking access, and it is clear that expanded coverage will depend on real-world results to demonstrate durable weight loss maintenance, the kind of results that we believe Rubida can offer.

Speaker Change #186: So, it's becoming clear that chronic administration burden of GLP-1s combined with potential side effects, high costs, and distribution issues has resulted in truly abysmal long-term adherence.

Speaker Change #186: The obesity market is in a situation where, having now substantially solved the problem of short-term weight loss, the incredible unmet need in obesity has shifted to the problem of durable weight maintenance.

Speaker Change #187: Yeah, so to be to be clear the sites that are actively enrolling so far are sites that are obesity centers

Speaker Change #187: What is so desperately needed for patients is a reliable and effective off-ramp from GLP-1 drug therapy.

Speaker Change #187: However, innovation in this space by other competitors cannot solve the problem of adherence and has rather therefore focused on a zero-sum game of superiority to existing drugs.

Speaker Change #187: All these alternatives are competing against each other for only one piece of the puzzle, which comprises the minority of patients who are willing to comply with a lifelong chronic drug regimen.

Speaker Change #187: It is clear that major players are beginning to pay very close attention to the issues around weight maintenance and the limitations of the drug product form in the treatment of obesity.

Speaker Change #188: not yet the endoscopy centers.

Speaker Change #188: And so we are going to be enrolling the reveal portion at hospitals that offer the endoscopy because of, for logistical reasons. We anticipate those patients will start coming in later on in the quarter. These first patients who are coming in are the ones that we're starting to put on tracepatide so that we can see the randomized data because that's a long pull on the tent for us.

Harry: Do you expect maybe some in preliminary safety data and second up to 25 or truly to tell us. We do expect that, you know, I think that you're going to get some your the safety that you're going to be looking to pay attention to here is is the the procedure itself causing any injury. And we are feeling confident that it won't based on our expensive experience and pre clinical models because of our experts who have been advising us in the development of this technique.

Speaker Change #189: Got it. Makes sense. Thanks. Thank you.

Speaker Change #190: Thank you. Our next question.

Speaker Change #190: It comes from the line of Umar Rafat of Evercore.

Umar Rafat: Hi guys, thanks so much for taking my question and congrats on all the progress this quarter. Just two questions for me. One, I just want to revisit the open label registry data that you reported.

Harry: Nevertheless, that should be an early signal. And then you're going to be wondering about the safety of the AAV itself. And that's usually a question that emerges over a four to six weeks period of time immediately after the intervention. But the questions around the efficacy and safety of the jail, if you want, as you know from other things, therapies will take weeks to months. And I think that that's going to be a question that we're going to begin to be able to answer in the back half of 25.

Umar Rafat: recently, I think last week.

Speaker Change #192: The weight loss data in this data cut definitely seems to have improved versus the three-month data cut presented at the DDG meeting in May. So I'm curious to see how this new data cut varied among individual patients.

Speaker Change #192: Also, in the DDG analysis, I think roughly one-third of the patients were on GLP-1s at baseline. And my question is, how far along into their GLP-1 therapy?

Harry: Great. Now, thanks so much for all the color looks like a lot of different data updates for various across your pipeline portfolio next 12 months and we look forward to seeing those updates evolved. Great. Thank you so much. Thank you. Our next question comes from the line of my goals of Morgan Stanley. Hey guys, thanks for taking the question. Maybe just to follow up on some of the earlier questions related to obesity and not sure how much you can comment here, but just if you could talk about the early rate of enrollment in remain and just maybe how that's tracking for sure, you know, expectations.

Speaker Change #192: Where are they at baseline? Were they already kind of at steady state or did they just begin and then have a follow-up?

Speaker Change #192: We were incredibly proud to share that earlier this month, the FDA recently granted breakthrough device designation for our Rovita system for use in maintaining weight loss after discontinuing GLP-1 drugs. Breakthrough device designation allows for acceleration of development, assessment, and FDA review for pre-market approval.

Speaker Change #193: Great, great question.

Speaker Change #194: If you look back at our pooled analysis from our Ravita clinical studies, what you will observe is a trend towards greater weight loss over time, over the period of one year in about 100 patients who are treated and followed in Ravita clinical studies, people with type 2 diabetes.

Speaker Change #194: We, and our scientific advisors, believe that this is a momentous event in the field of obesity management, because, to our knowledge, Revita is the first and only device developed for obesity to receive breakthrough device designation.

Speaker Change #194: The FDA has clearly specified that weight maintenance is defined as the achievement and maintenance of clinically meaningful weight loss for one year after the discontinuation of therapy.

Speaker Change #194: And despite the development of a range of products for obesity, ranging from peptides to small molecules to antibodies to even siRNA approaches, we are unaware of any other products in development that can come anywhere close to maintaining metabolic benefits for one year after discontinuation.

Speaker Change #194: So...

Speaker Change #194: That, I think, is consistent with what we are seeing here in terms of the profile of weight loss over time. And this is a really interesting question. Why is the weight loss increasing?

Speaker Change #195: you asked about how long people had been on GLP-1s, and I think you've rightly pointed out that of the 14 patients who were at six months earlier, five of them had been on GLP-1s. Of the 11 patients who are now on GLP-1s,

Harry: Hi Mike, we started enrolling earlier this earlier this month. We just announced it today. What we are seeing is that there's a lot of interest and enthusiasm where there's a bunch of patients who are lining up in the first centers to come in. This is consistent with what other people see in obesity trials, which tend to enroll five times as rapidly as some other studies. And so we're feeling encouraged, but it's still very early days and we happy to update you later on in the year as progressives and we have a little few more data points that we can we can call upon.

Speaker Change #195: Our confidence in Ravita is validated by what we're seeing in our real-world registry study in Germany, which continues to show impressive clinical results in the first tranche of patients who have achieved one year of follow-up. At baseline, prior to Ravita, these 11 patients had a median age of 62 years, median body weight of 111 kilograms, and advanced type 2 diabetes with an average of 15 years since diagnosis of diabetes.

Speaker Change #196: Sorry, of the 11 patients who are now at one year, exactly four of them were on GLP-1s.

Speaker Change #196: Despite using up to three different glucose-lowering medications, patients' type 2 diabetes remained uncontrolled prior to intervention with a median baseline HbA1c of 9.6%, which is quite high.

Speaker Change #196: As in prior studies of Revita, a majority of those who enrolled in the study have been men.

Speaker Change #196: These factors, advanced age, advanced type 2 diabetes, predominantly male gender, have all typically been associated with reduced efficacy of drugs to lower weight and blood sugar. And despite the fact that these individuals represent a hard-to-treat patient segment, at 12 months post-Revita, median weight decreased from 111 kilograms to 97 kilograms, representing nearly 13 percent total body weight loss.

Speaker Change #196: We will be presenting data in larger numbers of patients at a scientific meeting later this year. So data from this real-world registry, while relatively small numbers at one year so far, validate the results that we have seen from pooled analyses of over 100 Ravita clinical trial patients who had previously been followed for a year or more.

Speaker Change #196: And median HbA1c decreased from 9.6 percent to 7.2 percent, which is a substantial improvement in blood sugar control in individuals who had truly poorly controlled disease.

Speaker Change #196: The data from Germany are a promising indicator, therefore, for our weight maintenance remain one pivotal study, as well as our type two diabetes revitalized one pivotal study.

Speaker Change #196: at the time that they enrolled in the study.

Speaker Change #196: We believe the German registry experience also provides important read-through for the potential on-label results Ravita may see in other regions, including the United States, if and when approved.

Speaker Change #196: What's more, we look ahead to the next several quarters in Germany, where Ravita has a CE mark label to treat inadequately controlled type 2 diabetes despite the use of glucose-lowering medications, where we have enthusiastic investigators and patients who are now one year post-Ravita leading lives that are generally healthier and less burdened by disease and disease management than before Ravita.

Speaker Change #196: In parallel, we are beginning to enroll patients in our Open Label Reveal-1 cohort for people who are already on a GLP-1 drug and looking for an off-ramp to keep the weight off after stopping these drugs.

Speaker Change #196: Given the feedback from physicians and patients within the registry and these remarkable clinical results for patients who would rather live with poorly controlled type 2 diabetes than take another medication and are opting for Ravita to improve their glucose control and to lower weight without needing more medicines, we are gratified to have a waiting list of hospitals and physicians throughout Germany who would like to begin offering Ravita for their patients, and we anticipate offering Revita at additional centers in Germany over the course of the next several quarters and to turn attention from purely running a registry in the country to begin to inform and educate patients and physicians to see if Revita is right for them.

Speaker Change #196: We anticipate reporting early data from the Reveal-1 Open Label cohort in the fourth quarter of 2024.

Speaker Change #197: And we understand from the treating physician that they had been on GLP-1s for some period of time, but we really do not have detailed retrospective EMR data to confirm exactly how long they had been on those drugs.

Speaker Change #197: As we've been ramping up our Remain One study for weight maintenance, our focus has been on leveraging centers of excellence with GI endoscopists who are already involved in our revitalized clinical program. In particular, we've developed strong relationships with GI endoscopists who have a specific area of interest in bariatric and metabolic endoscopy, given the critical role of the gut in controlling obesity and metabolic disease.

Speaker Change #197: Both Remain-1 and Reveal-1 underscore our important commitment to this area of weight maintenance after GLP-1 discontinuation.

Speaker Change #197: Something we've been told time and again from doctors is that they have an overwhelming number of patients who are desperate to lose weight and to keep it off.

Speaker Change #197: Turning toward Revita for type 2 diabetes.

Speaker Change #197: Our goal with Revitalize 1 is to establish Revita as a safe, effective, and straightforward treatment alternative to medication escalation for patients with type 2 diabetes. As we are beginning to see in Germany, we believe patients may choose this as early as second line or as an alternative to initiating injectables or insulin or escalating insulin therapy.

Speaker Change #197: And many bariatric and metabolic focus endoscopists who we are recruiting for the clinical trials are already building obesity practices due to high demand for their services. Many of them have a ready pool of patients who are potential Ravita candidates within their own GI groups and a motivation to build these practices to offer additional therapies for a larger number of patients. These GI doctors also have deep relationships with primary care physicians who already refer patients to them, allowing for a natural referral network for patients to be identified and treated in endoscopy centers.

Speaker Change #197: The common factor influencing patient behavior is a desire to have better disease control while avoiding medication escalation.

Speaker Change #197: After speaking with these doctors, we are confident that our focus on these highly trained specialists will allow us to build a significant network of physicians who can easily introduce the approximately 40-minute Revita procedure seamlessly into their practice. Millions of patients with obesity and type 2 diabetes are already seeing gastroenterologists regularly and millions of endoscopies are performed annually for people with obesity and type 2 diabetes. Of the estimated 20 million endoscopies that are performed each year in the United States, roughly 40% of people, or 8 million endoscopies, are already being performed annually for people with obesity in the U.S. So these patients are already coming to endoscopy, already getting procedures, and Revita is purpose-built to fit into this high-volume, highly scalable work.

Speaker Change #197: In June, we announced our plans to significantly expand or revitalize one pivotal study of Rovita to include patients with type 2 diabetes who are inadequately controlled on any glucose-lowering agent, including GLP-1s and or insulin, thereby expanding our potential U.S. treatment population by about six-fold. We continue to enroll the study and anticipate reporting top-line data in mid-2025.

Speaker Change #197: What this allows is a targeted and efficient commercial model that would allow us to focus on bariatric and metabolic endoscopists to help build on their existing practices to offer Revita for potential indications that they cannot currently offer today.

Speaker Change #197: Finally, we wanted to turn to our nutrient-responsive GLP-1 gene therapy platform, REJUVA. We continue to generate preclinical data that excites the scientific and medical community for the potential game-changing nature of this platform. We have shared new head-to-head preclinical data comparing REJUVA to semaglutide, which demonstrated that treatment with REJUVA yielded robust and durable weight loss in mice with diet-induced obesity and also enabled sustained weight maintenance following semaglutide withdrawal. Importantly, mice treated with REJUVA demonstrated a greater relative proportion of loss of fat mass to lean mass than those treated with semaglutide, and this has been flagged, as you know, as a significant potential risk with currently approved GLP-1 drugs.

Speaker Change #197: This is not the same approach as prescribing an oral or injectable agent for weight loss, but we do believe this is a highly attractive therapeutic alternative to the clearly very large segment of patients who are looking for a durable weight loss solution without being on chronic drugs.

Speaker Change #197: With these exciting accomplishments, we are now gearing up for a catalyst-rich second half of 2024, including key inflection points across both platforms.

Speaker Change #197: We look forward to speaking more about our targeted and efficient commercial model and the path forward to that in future quarters.

Speaker Change #197: In REVITA, we will have initial data from the REVEAL-1 open label cohort in weight maintenance by the end of the year, in addition to ongoing updates from our Germany real-world registry data impacting REVITA's potential in both obesity and in type 2 diabetes.

Speaker Change #197: Back to Revita Clinical Development.

Speaker Change #197: In REJUVA, we anticipate completing IND-enabling studies for REJUVA-1, our first candidate targeting type 2 diabetes, as well as additional data presentations on the REJUVA GLP-1 platform and major scientific congresses in the second half of the year.

Speaker Change #197: As you'll remember, REMAIN 1 is our pivotal study for weight maintenance after GLP-1 drug discontinuation in obesity. Having obtained FDA IDE approval for this study at the end of Q1, we are pleased to report that we have now initiated the study and are actively enrolling at several centers in the United States.

Speaker Change #197: We see incredible enthusiasm from physicians and patients as we begin to ramp up study enrollment, and we anticipate reporting a midpoint data analysis in the second quarter of 2025, which will evaluate approximately 45 patients who have been randomized and followed for 12 weeks post-treatment with Revita or SHAM.

Speaker Change #197: These are patients who were not previously on trizepatide who will be achieving 15% total body weight loss.

Speaker Change #197: And then trizepatide will be discontinued and they will be randomized and then followed for 12.

Speaker Change #198: However, a couple of them were on Trulicity, and so you could imagine they probably weren't recently put on Trulicity, and so that suggests to me that they've been on the weight loss on their GLP-1s for some length of time. One of these patients

Harry: Yep, makes sense. And are you seeing more are you seeing faster enrollment, maybe in in the reveal sort of open label cohort versus remain, you know, just because patients will have the opportunity to get on a GLP one first. Yeah, so to be to be clear, the sites that are actively enrolling so far are sites that are obesity centers, not yet the endoscopy centers. And so we're going to be enrolling the reveal portion at hospitals that offer the endoscopy because of for logistical reasons.

Speaker Change #198: switch their GLP-1 from one agent to another during the follow-up period. Two of them stayed on their GLP-1 throughout the follow-up period, and the other one stopped their GLP-1 during the follow-up period and then did not resume it through one year of follow-up.

Speaker Change #199: So there's a lot of people a lot of in the real world a lot of medication

Speaker Change #199: is happening for

Speaker Change #200: these patients. And as a doctor who took care of these patients and as a son of a person with type 2 diabetes, I can tell you I'm like super sympathetic to the effort required for chronic medical therapy for people with multiple diseases. Lots of different doctors changing medicines all of the time to address symptoms, side effects.

Harry: We anticipate those patients will start coming in later on in the quarter. These first patients who are coming in are the ones that we're starting to put on tersepetite so that we can see the randomized data because that's the long pull on the tent, for us. Got it makes sense. Thanks. Thank you. Our next question comes from the line of Omer Refot of Evercore. Hi guys, thanks so much for taking my question and congrats on all the progress this quarter.

Speaker Change #200: formulary changes, drug-drug interactions, all of the things in the real world that impact a drug's ability to have an effect.

Speaker Change #200: that you don't really see in phase 3 clinical trials.

Speaker Change #200: Despite all of that, what's kind of surprising is that 10 of the 11 patients have these have either reductions or stable medicines over a one-year period of time and yet are seeing profound improvements in weight and in blood sugar control that's just as strong, if not stronger, at one year than it was at one, three, and six months.

Harry: It's two questions from me. One is, want to revisit the open label registry data that you reported recently, I think last week. The weight loss data in this data cut definitely seems to have improved versus the free month data cut presented at the DDG meeting in May. So I'm curious to see how this new data cut varied among individual patients. Also in the DDG analysis, I think roughly one-third of the patients were on GLP1s at baseline and my question is how far along into their GLP1 therapy were they at baseline?

Speaker Change #200: So that's a positive sign for us, but obviously we'll be continuing to follow more patients, and we have a public presentation of more data coming up in the fall where we will we can go through a lot more information including patient level data at various time points and really give a lot more color on what we're seeing with larger numbers of people which is going to be important.

Speaker Change #201: You're so sick.

Speaker Change #202: okay so that kind of preempted my follow-up question to that it was that like

Speaker Change #203: Because I know in the DDG data cut at three months, there was considerable variability in the weight loss. I was going to ask.

Harry: Were they already kind of a steady state? Or did they just begin and then have a follow-up? Great. Great question. So if you look back at our full analysis from our Roveda Clinical Studies, what you will observe is a trend towards greater weight loss over time, over the period of one year, in about a hundred patients who are treated and followed in Roveda Clinical Studies, people with type 2 diabetes. So that I think is consistent with what we are seeing here in terms of the profile of weight loss over time.

Speaker Change #204: whether there were any notable baseline or disease state characteristic differences in patients who didn't lose that much weight, but if you can't comment now, I'll just wait until later on in the year.

Speaker Change #205: Yeah, I think we'll wait until later on in the year, but I don't think we're seeing anything that's different than what other obesity drugs are showing in terms of a waterfall plot of weight over time, but we will go into that in more detail later in the year. Thank you, Mike.

Speaker Change #206: Okay, and then my follow-up question is actually a clarification question on REJUVA regarding the seminal

Harry: And this is a really interesting question. Why is the weight loss increasing? You asked about how long people had been on GLP1s. And I think you've already pointed out that of the 14 patients who were at six months earlier, five of them had been on GLP1s. Of the 11 patients who were now on GLP1s, sorry, of the 11 patients who are now at one year, exactly four of them were on GLP1s at the time that they enrolled in the study.

Speaker Change #207: obesity data that was presented at ADA and in the DIO mice. And my question, was the semaglutide dose received in mouse, what was the equivalent human dose of that?

Speaker Change #208: Well, in order to be consistent to the db-db data that we had generated earlier, we chose exactly the same dose per kilogram in the mice that we had used in the earlier db-db studies, which was the maximum glucose-lowering dose.

Harry: And we understand from the treating physician that they had been on GLP1s for some period of time. But we really do not have detailed retrospective EMR data to confirm exactly how long they had been on those drugs. However, a couple of them were on trulicity. And so you could imagine they probably weren't recently put on trulicity. And so that's suggesting me that they've been on the weight loss on their GLP1s for some length of time.

Speaker Change #208: drug concentration seen in somaglutide in those mice. So it would be equivalent to the top dose of what's prescribed for type 2 diabetes in those mice.

Speaker Change #208: We will also be nominating our second candidate, Rejuva 2, for obesity in the second half of the year.

Speaker Change #208: Yeah.

Speaker Change #208: Thank you.

Speaker Change #209: Excellent. And just one really quick follow-up question. For the rejuva-obesity construct, which is still yet to be nominated, in addition to the human GLP-1 promoter that will presumably be included in this construct,

Harry: One of these patients switched their GLP1 from one age into another during the follow-up period, two of them stayed on their GLP1s throughout the follow-up period. And the other one stopped their GLP1 during the follow-up period and then did not resume it through one year of follow-up. So there's a lot of people, a lot of in the real world, a lot of medication changes happening for these patients. And as a doctor who took care of these patients and as a son of a person who touched diabetes, I can tell you I'm like super sympathetic to the effort required for chronic medical therapy for people with multiple diseases.

Speaker Change #210: Can you speak to any updates as to what you're thinking of in terms of additional mechanisms that this contract might include and whether adding those additional mechanisms may kind of offset or mitigate the activity or efficacy of the contract?

Speaker Change #210: the original GLP-1 component.

Speaker Change #211: You know, one of the challenges that we have here is an abundance of riches. Candidly, all of these metabolic hormones are small peptides. They can be put together combinatorially or they can be acting independently.

Harry: Lots of different doctors changing medicines all of the time to address symptoms, side effects, formulary changes, drug-drug interactions, all of the things in the real world that impact a drug's ability to have an effect are that you don't really see in base three clinical trials. Despite all of that, what's kind of surprising is that 10 of the 11 patients have either reductions or stable medicines over a one year period of time and yet are seeing profound improvements in weight and in blood sugar control that's just as strong if not stronger at one year than it was at one three and six months.

Speaker Change #211: For instance, you could imagine a GLP-1 alone, or you could imagine a GIP-GLP-1 combination, or you could imagine an amylin alone, or any combination thereof.

Speaker Change #211: So, there's a lot of potential variables to work through.

Speaker Change #211: And so we are liking what we're seeing with GLP-1 alone. We're also liking what we're seeing in GIP and GLP-1 combinations.

Speaker Change #211: And we think that this platform that leverages the Human Insulin Promoter can have...

Harry: So that's a positive sign for us but obviously we'll be continuing to follow more patients and we have a public presentation and more data coming up in the fall where we will we can go through a lot more information including patient-level data at various time points and really give a lot more color on what we're seeing with larger numbers of people which is going to be important. Okay, so that kind of prompted my follow-up question to that.

Speaker Change #211: Um...

Speaker Change #211: lot of optionality to it and we're working through some of that and when we nominate the candidate we'll explain to you our rationale for why we chose what we chose.

Speaker Change #211: But just know that we are thinking through all of the possibilities here in order to choose the best path.

Speaker Change #211: from a clinical regulatory perspective with a principal focus on ensuring that what we're doing is going to be safe.

Harry: It was that like, because I know in the DDG data cut at three months there was kind of considerable variability in the weight loss. I was going to ask whether there were any notable baseline or disease-take characteristic differences in patients who didn't lose that much weight, but if you can't comment now, I'll just wait until later on in the year. Yeah, I think we'll wait till later on in the year, but I don't think we're seeing anything that different than what other obesity drugs are showing in terms of a waterfall plot of weight over time, but we will go into that in more detail later in the year.

Speaker Change #211: for the population that we're treating. And I think that that has to be the first objective for this therapy, because the efficacy signal that we're seeing in terms of obesity with GLP-1 alone is already

Speaker Change #211: very, very meaningful in the preclinical models. So if we're going to add other mechanisms in, we're going to have to be thoughtful about the trade-off between what we already know and what we still have to learn. We'll tell you more later this year.

Harry: Thank you, Mike. Okay, and then my follow-up question is on, is that a clarification question on Rajuva regarding the seminal obesity data that was presented at ADA in the DIO mice. And my question was the semiglutide dose received in mouse. What was the equivalent human dose of that? Well, in order to be consistent to the DVDB data that we had generated earlier, we chose exactly the same dose per kilogram in the mice that we had used in the earlier DVDB studies, which was the maximum glucose lowering drug concentration seen in semiglutide in those mice.

Harry: So it would be equivalent to the top dose of what's prescribed for type 2 diabetes in those mice. Excellent, and just I guess one really quick follow-up question. For the Rajuva obesity construct, which is still yet to be nominated, in addition to the human gelp1 promoter that so what you're thinking in terms of additional mechanisms that this construct might include and whether adding those additional mechanisms may offset or mitigate the activity or efficacy of the original GLP1 component.

Speaker Change #212: Excellent. Listen, thanks so much for taking my questions. Again, congrats on all the progress.

Speaker Change #213: Thank you very much.

Speaker Change #213: Now...

Speaker Change #213: We are very excited with the progress our team has made and the near-term data we plan to share across both programs, which we believe will reinforce our leadership position in addressing the massive unmet need in obesity to offer sustained solutions for obesity and metabolic disease.

Speaker Change #213: And before I pass the call over to Lisa, I also want to provide another business update.

Speaker Change #214: In order to wrap up.

Speaker Change #214: Alan Will, our longtime chair of the board, has decided to step down from our board after 12 years of distinguished service. We are fortunate to have benefited from Alan's guidance as chair over these last 12 years. His leadership helped us to grow from an early-stage research company to a public company with two pivotal studies in two major disease categories and an exciting gene therapy pipeline. We are grateful for his years of service, and we wish him the very best. Alan will serve as an advisor to Ajay Royan, who has been appointed as the new Chair of the Board.

Speaker Change #214: I am pleased that Ajay will step in as Chair during this critical inflection point for Fractyl. His passion, extensive experience, and strategic vision will be invaluable as we accelerate development of our products towards potential regulatory, approval, and commercialization.

Speaker Change #214: Thank you, Hari.

Speaker Change #215: I want to thank everyone for joining us this afternoon. We appreciate your continued interest and your support, and we look forward to continuing to share updates on our progress as we seek to change the landscape of obesity and type 2 diabetes. Thank you so much. Talk soon.

Speaker Change #215: With that, I will now turn the call to Lisa to provide an update on our second quarter financials.

Speaker Change #215: In the second quarter of 2024, revenue was generated from our commercial pilot in Germany and enabled patients to enroll in the German Railroad Registry System.

Speaker Change #215: Lisa?

Speaker Change #215: Turning to operating expenses.

Speaker Change #215: Research and development expense in the second quarter of 2024 were $16.8 million compared to $9.1 million for the same period in 2023. The increase during the quarter was primarily due to the initiation of the Remain-1 study, the progress made in the Revitalize-1 study, and continued development of the REJUVA program, as well as increased personal-related expenses, including stock-based compensation.

Speaker Change #215: Selling general and administrative expense in the second quarter of 2024 was $6.2 million compared to $2.8 million in the same period in 2023. The increase was primarily due to professional service expenses and other costs associated with operating as a publicly traded company, and increased personnel-related expenses, including stock-based compensation.

Speaker Change #215: I will now turn the call back to her.

Speaker Change #215: For the second quarter of 2024, we reported a net loss of $17.2 million, compared to a net loss of $30.2 million for the same period in 2023. The decrease in net loss was primarily attributed to the non-cash change in fair value of notes payable and warrant liabilities, as well as increased interest income, offset by the increase in operating costs.

Speaker Change #215: As of June 30, 2024, we had cash and cash equivalent of $102.4 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 into Q4 2025.

Speaker Change #215: Thank you, Lisa.

Speaker Change #215: As you can see, we've made significant progress over the last quarter to take advantage of our unique opportunity to become an industry leader in weight maintenance.

Speaker Change #215: Talk soon.

Speaker Change #215: While there seems to be a new drug targeting obesity every month that promises improved tolerability or a new mechanism, the truth remains that they are all seeking to tackle the obesity epidemic in the same way, through chronic administration, which is simply not sustainable for most people.

Speaker Change #215: At Fractyl, our goal is to provide solutions that free people from the burden of obesity and metabolic disease through sustainable solutions that have lasting benefits and do not depend on long-term adherence. As we enter the second half of 2024, we have several key clinical and preclinical milestones that have the potential to help us realize our vision of delivering durable disease-modifying therapies to patients suffering from metabolic disease.

Speaker Change #215: This concludes today's conference call.

Speaker Change #215: I would like to take this opportunity to thank the patients and physicians who continue to put their trust in us and our products, the employees at Fractyl who are laser-focused on delivering life-changing therapies, and you, our shareholders.

Speaker Change #215: We are grateful for your support and more optimistic than ever before about our prospects to deliver on our promise.

Speaker Change #215: And with that, we will now open the call up for questions.

Speaker Change #215: Thank you very much.

Speaker Change #216: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change #216: As a reminder, to ask a question, you will need to press star 1-1 on your telephone.

Speaker Change #216: To remove yourself from the question queue, you may press star 1-1 again.

Speaker Change #216: Please stand by while we compile the Q&A roster.

Speaker Change #216: The first question, comes from the line of Jason Gerberry of B of A.

Speaker Change #216: Oh, hi, this is Chi on for Jason this afternoon.

Speaker Change #216: Thanks for all the update and thanks for taking up questions.

Speaker Change #216: We have 2 questions.

Speaker Change #216: Maybe the 1st, 1 on Bravita.

Speaker Change #216: Uh, given you have some data coming out from the review 1 open label data in 4th quarter, I'm hoping that you can maybe provide a little bit more color on your expectation for the open label data in 4Q.

Speaker Change #216: Um, how large might the sample size be?

Speaker Change #216: And would you expect to follow up to be sufficiently long enough to get an initial read on the main the efficacy and way making?

Speaker Change #216: And looking more broadly into next year, you will also have some control data from the Remain-1 study in second quarter 25, hoping you can provide some color to discuss how might the initial Review-1 data help inform the revita therapeutic potential ahead of the bigger second quarter 25 update and then for follow-up updates.

Speaker Change #216: Great.

Speaker Change #216: Thank you, Chi.

Speaker Change #216: Appreciate the question.

Speaker Change #216: As everyone knows, we are really excited about the Remain Pivotal study. It has two arms.

Speaker Change #216: One of them is the reveal one arm for people who are already on GLP-1s and looking for an off-ramp, and that will be an open-label study wherein we will be enrolling subjects who are currently taking either semaglutide or trazepatide and will be discontinuing the therapy immediately before giving them Revita. We anticipate that within four to eight weeks, patients will have an increase in hunger and will have steadily increasing weight regain if they do not benefit from the therapy, because that is what we have seen from studies of semaglutide withdrawal or trazepatide withdrawal in the randomized trials that they have presented, but also in routine clinical practice.

Speaker Change #216: We're giving patients digital scales that will allow us to get daily readings on what their weights are and we'll be getting them to come into the clinic at week four and then again at week 12 and we're going to have data from the first 10 patients emerging at the end of the year and we anticipate enrolling a total of 20 patients in this open label study so we'll have accruing data into Q1 of 2025.

Speaker Change #216: I do believe that if Revita is helping preserve weight loss in these individuals you're going to begin to see that very soon after they stop their GLP-1.

Speaker Change #216: You're going to see that based on how hungry they feel, you're going to see that based on how their weight trajectories look and I do believe that that will be predictive as is the German registry data of what we might expect to see in terms of the ability to sustain a lower weight for a prolonged period of time.

Speaker Change #216: Now turning to your question about the Remain midpoint data analysis, you know we have heard from players in the space that control data would be valuable in order to be able to de-risk the clinical and regulatory opportunity for Revita in weight maintenance and so we have built into the study a plan to do an interim, sorry a midpoint analysis of 45 subjects, at 12 weeks of follow-up, wherein there will be a two-to-one randomization between Revita and Sham.

Speaker Change #216: So the basic question is, what does the trajectory of weight regain look like in the Revita arm versus the Sham arm over that 12-week period of time?

Speaker Change #216: And are we beginning to see that there is a separation between the two groups that would enable us to predict the likelihood of success in achieving our primary efficacy endpoint at 24 weeks?

Speaker Change #216: And that's the data that we will begin to present in Q2, and you can obviously imagine that we'll be continuing to follow those patients, and we'll give you data updates into the back half of 25 as well.

Speaker Change #216: Got it.

Speaker Change #216: Before I move to my second question, I just want to confirm your fourth quarter data.

Speaker Change #216: You said you expect maybe somewhere around 10 patients' worth of data.

Speaker Change #216: Will they have, say, a four-week follow-up so that you can get an initial read on the efficacy and weight maintenance?

Speaker Change #216: Or would you expect to follow patients longer, maybe sometime in the 25, before you can get a read of the weight maintenance therapeutic potential?

Speaker Change #216: I think you're going to start to get a signal with those 10 patients at least at four weeks in terms of their clinic visit, but we're also planning to have digital scales that will give us a more real-time read on how these patients are doing, however long they've been followed after the procedure.

Speaker Change #216: And the beautiful thing about this is you're just going to see those curves and see how they're beginning to play out over time.

Speaker Change #216: We'll have to compare that to what you would expect with terzepatide withdrawal from the terzepatide Surmount 4 study.

Speaker Change #216: Got it.

Speaker Change #216: Thanks.

Speaker Change #216: And maybe moving on to my second question on Rejuva Euclid 1 gene therapy.

Speaker Change #216: I'm curious, can you provide a bit more color on how close you are to completing the IND enabling work?

Speaker Change #216: Do you expect the regulatory hurdle for at least for clinical trial initiation to be pretty straightforward based on conversations you may have already had with the regulator or regulators?

Speaker Change #216: And given your plan to initiate a first-in-human study first half next year, I'm curious when my investor, you know, can expect to see initial human data for the REJUVA program.

Speaker Change #216: Thanks so much.

Speaker Change #216: Yeah, great question, Chi.

Speaker Change #216: I think that we have met with regulators in Europe to discuss our REJUVA-1 preclinical development, and we have alignment with them on the preclinical animal models to be used, which are the DBDB mice and the Yucatan pig, small animal model for efficacy, large animal model for safety toxicology because it mimics the human route of administration. We already have extensive experience and have already shown data on all of the above with REJUVA-001 candidates and are working our way through the same with our development candidates itself.

Speaker Change #216: We do, we've also come to an alignment with regulators about the types of biodistribution studies that need to be completed and the patient population being individuals who are inadequately controlled with type 2 diabetes who are already on a GLP-1 drug therapy and are able to benefit from it and tolerate it in order to be able to de-risk both the safety and the potential efficacy of the REJUVA-1 candidate in that type 2 diabetes patient population. So, we have alignment on all of those things.

Speaker Change #216: I do think that we have, some work to do to finalize the CMC requirements, and we will be working to gain greater clarity on that in the second half of 2024.

Speaker Change #216: And that will be the major next step before we feel like we're ready to file for a fine.

Speaker Change #216: Oh, great.

Speaker Change #216: Um, so, um, do you talk about, you know, do you have any expectation for any the timing for initial human data?

Speaker Change #216: Do you expect maybe some in preliminary safety data in 2nd of 25 or too early to count?

Speaker Change #216: We do expect that, you know, I think that you're going to get some, the safety that you're going to be looking to pay attention to here is the procedure itself causing any injury, and we are feeling confident that it won't based on our extensive experience in preclinical models because of our experts who have been advising us in the development of this technique.

Speaker Change #216: Nevertheless, that should be an early signal.

Speaker Change #216: And then you're going to be wondering about the safety of the AAV itself, and that's usually a question that emerges over a four to six week period of time immediately after the intervention.

Speaker Change #216: But the questions around the efficacy and safety of the GLP-1, as you know from other gene therapies, will take weeks to months, and I think that that's going to be a question that we're going to begin to be able to answer in the back half.

Speaker Change #216: Great.

Speaker Change #216: Thanks so much for all the color.

Speaker Change #216: Looks like a lot of different data updates for various across your pipeline portfolio next 12 months and we look forward to seeing those updates evolve.

Speaker Change #216: Great, thank you so much.

Speaker Change #216: Thank you.

Speaker Change #216: Our next question comes from the line of Michael of Morgan Stanley.

Speaker Change #216: Hey guys, thanks for taking the question.

Speaker Change #216: Maybe just to follow up on some of the earlier questions related to obesity.

Speaker Change #216: Not sure how much you can comment here, but just if you could talk about the early rate of enrollment in Remain and just maybe how that's tracking versus your.

Harry: You know, one of the challenges that we have here is an abundance of riches candidly. All of these metabolic hormones are small peptides. They can be put together combinatorially or they can be acting independently. For instance, you could imagine a GLP1 alone or you could imagine a GIPGLP1 combination or you could imagine an amelene alone or any combination thereof. So there's a lot of potential variables to work through. And so we are liking what we're seeing with GLP1 alone.

Speaker Change #216: Thank you, earlier this month.

Speaker Change #216: We just announced it today.

Speaker Change #216: What we are seeing is that there's a lot of interest and enthusiasm.

Speaker Change #216: There's a bunch of patients who are lining up in the first centers to come in.

Speaker Change #216: This is consistent with what other people see in obesity trials, which tend to enroll five times as rapidly as some other studies.

Speaker Change #216: And so we're feeling encouraged, but it's still very early days and we'd be happy to update you later on in the year as it progresses and we have a little few more data points that we can we can call upon, makes sense.

Speaker Change #216: Are you seeing more?

Speaker Change #216: Are you saying faster enrollment maybe in, in the reveal sort of, open label cohort versus remain, you know, just because patients will have the opportunity to get on a GLP-1 first.

Speaker Change #216: Yeah.

Speaker Change #216: So, to be clear, the sites that are actively enrolling so far are sites that are obesity centers, not yet the endoscopy centers.

Speaker Change #216: And so, we are going to be enrolling the reveal portion at hospitals that offer the endoscopy for logistical reasons.

Speaker Change #216: We anticipate those patients will start coming in later on in the quarter.

Speaker Change #216: These first patients who are coming in are the ones that we're starting to put on traceptive so that we can see the randomized data because that's a long pull on the 10%.

Speaker Change #216: Got it.

Speaker Change #216: Makes sense.

Speaker Change #216: Thank you.

Speaker Change #216: Our next question, comes from the line of Umar Rafat of Evergreen.

Speaker Change #216: Hi guys, thanks so much for taking my question and congrats on all the progress this quarter.

Speaker Change #216: Just two questions from me.

Speaker Change #216: One, I just want to revisit the open label registry.

Speaker Change #216: I think last week.

Speaker Change #216: The weight loss data in this data cut definitely seems to have improved versus the free month data cut, presented at the DDG meeting in May.

Speaker Change #216: So I'm curious to see how this new data cut varied among individual patients.

Speaker Change #216: Also, in the DDG analysis, I think roughly one-third of the patients were on GLP-1s at baseline.

Speaker Change #216: And my question is, how far along into their GLP-1 therapy?

Speaker Change #216: were they at baseline?

Speaker Change #216: Were they already kind of at steady state or did they just begin?

Speaker Change #216: and then I have a follow-up.

Speaker Change #216: Great, great question.

Speaker Change #216: So, If you look back at our full analysis from our Rovita clinical studies, what you will observe is a trend towards greater weight loss over time, over the period of one year, in about 100 patients who are treated and followed in Rovita clinical studies, people with type 2 diabetes. So that, I think, is consistent with what we are seeing here in terms of the profile of weight loss over time.

Speaker Change #216: And this is a really interesting question.

Speaker Change #216: Why is the weight loss increasing?

Speaker Change #216: You asked about how long people had been on GLP-1s. And I think you've already pointed out that of the 14 patients who were at six months earlier, five of them had been on GLP-1s.

Speaker Change #216: Of the 11 patients who are now on GLP-1s, Sorry, of the 11 patients who are now at one year, exactly four of them were on GLP-1, at the time that they enrolled in the study.

Speaker Change #216: And we understand from the treating physician that they had been on GLP-1s for some period of time, but we really do not have detailed retrospective EMR data to confirm exactly how long they had been on those drugs. However, a couple of them were on Trulicity, and so you could imagine they probably weren't recently put on Trulicity, and so that suggests to me that they've been on the weight loss on their GLP-1s for some length of time. One of these patients switched their GLP-1 from one agent to another during the follow-up period.

Speaker Change #216: Two of them stayed on their GLP-1s throughout the follow-up period, and the other one stopped their GLP-1 during the follow-up period, and then did not resume it through one year of follow-up. So there's a lot of, in the real world, a lot of medication changes happening for these patients.

Harry: We're also liking what we're seeing in GIPGLP1 combinations. And we think that this platform that leverages the human insulin promoter can have a lot of optionality to it, and we're working through some of that. And when we nominate the candidate, we'll explain to our rationale for why we chose what we chose, but just know that we are thinking through all of the possibilities here in order to choose the best path from a clinical regulatory perspective with a principal focus on ensuring that what we're doing is going to be safe for the population that we're treating.

Speaker Change #216: And as a doctor who took care of these patients, and as a son of a person with type 2 diabetes, I can tell you I'm like super sympathetic to the effort required for chronic medical therapy for people with multiple diseases.

Speaker Change #216: Lots of different doctors changing medicines all of the time to address symptoms, side effects, formulary changes, drug-drug interactions, all of the things in the real world that impact a drug's ability to have an effect, or that you don't really see in phase three clinical trials.

Speaker Change #216: Despite all of that, what's kind of surprising is that 10 of the 11 patients have these, have either reductions or stable medicines over a one-year period of time, and yet are seeing profound improvements in weight and in blood sugar control that's just as strong, if not stronger, at one year than it was at one, three, and six months.

Speaker Change #216: So that's a positive sign for us, but obviously we'll be continuing to follow more patients.

Speaker Change #216: And we have a public presentation and more data coming up in the fall, where we can go through a lot more information, including patient level data at various time points and really give a lot more color on what we're seeing with larger numbers of people, which is gonna be important.

Speaker Change #216: Okay, so that kind of preempted my follow-up question to that, it was that.

Speaker Change #216: Because I know in the DDG data cut, free month, there was considerable variability in the weight loss.

Speaker Change #216: I was going to ask whether there were any notable baselines, disease state characteristic differences in patients who didn't lose that much.

Speaker Change #216: If you can't comment now, I'll just wait until later on.

Speaker Change #216: Yeah, I think we'll wait till later on in the year.

Speaker Change #216: But I don't think we're seeing anything that's different than what other obesity drugs are showing in terms of a waterfall plot of weight over time.

Speaker Change #216: But we will go into that in more detail later in the year.

Speaker Change #216: Thank you.

Speaker Change #216: And then my follow-up question is on, it's actually a clarification question on REJUVA, regard...

Speaker Change #216: Seminole.

Speaker Change #216: BC data that was presented at AD.

Speaker Change #216: And my question, was the semaglutide dose received in mouse, what was the equivalent human dose of that? Well, in order to be consistent to the dbdb data that we had generated earlier, we chose exactly the same dose per kilogram in the mice that we had used in the earlier dbdb studies, which was the maximum glucose-lowering drug concentration seen in somaglutide in those mice. So, it would be equivalent to the top dose of what's prescribed for type 2 diabetes in those mice.

Speaker Change #216: Okay.

Speaker Change #216: Thank you.

Speaker Change #216: Just one really quick follow-up question.

Speaker Change #216: For the Rejuva Obesity Construct, which is still yet to be, nominated, in addition to the human JLP1 promoter that will presumably be included in this construct, speak to any updates as to what you're thinking of in terms of additional mechanisms that this contract might include and whether adding those additional mechanisms may offset or mitigate the activity or efficacy of the original contract.

Speaker Change #216: You know, one of the challenges that we have here is an abundance of riches.

Speaker Change #216: Candidly, all of these metabolic hormones are small peptides. They can be put together combinatorially or they can be acting independently.

Speaker Change #216: For instance, you could imagine a GLP-1 alone, or you could imagine a GIP-GLP-1 combination, or you could imagine an amylin alone, or any combination thereof.

Speaker Change #216: So, there's a lot of potential variables to work through, and so we are liking what we're seeing with GLP-1 alone.

Speaker Change #216: We're also liking what we're seeing in GIP and GLP-1 combinations, and we think that this platform that leverages the Human Insulin Promoter can have potential, a lot of optionality to it, and we're working through some of that.

Speaker Change #216: And when we nominate the candidate, we'll explain to you our rationale for why we chose what we chose, but just know that we are thinking through all of the possibilities here in order to choose the best path from a clinical regulatory perspective with a principal focus on ensuring that what we're doing is going to be safe for the population that we're treating.

Speaker Change #216: And I think that has to be the first objective for this therapy, because the efficacy signal that we're seeing in terms of obesity with GLP-1 alone is already very, very meaningful in the preclinical models.

Speaker Change #216: So if we're going to add other mechanisms in, we're going to have to be thoughtful about the trade-off between what we already know and what we still have to learn.

Speaker Change #216: We'll tell you more later this week.

Speaker Change #216: And thanks so much for taking my questions.

Speaker Change #216: Again, congrats.

Speaker Change #216: Thank you very much.

Speaker Change #216: Now.., in order to wrap up.

Speaker Change #216: Um, I want to thank everyone for joining us this afternoon.

Speaker Change #216: We appreciate your continued interest and your support, and we look forward to continuing to share updates on our progress as we seek to change the landscape of obesity and type 2 diabetes.

Speaker Change #216: Thank you so much.

Harry: And I think that has to be the first objective for this therapy because the efficacy signal that we're seeing in terms of obesity with GLP1 alone is already very, very meaningful in the pre-clinical models. So if we're going to add other mechanisms in, we're going to have to be thoughtful about the trade-off between what we already know and what we still have to learn. We'll tell you more later, this year. Thanks, Lynn. Listen, thanks so much for taking my questions again. Congrats on the progress. Thank you very much.

Operator: Now, in order to wrap up, I want to thank everyone for joining us this afternoon. We appreciate your continued interest and your support. And we look forward to continuing to share updates on our progress as we seek to change the landscape of obesity and type 2 diabetes. Thank you so much. Talk soon. This concludes today's conference call. Thank you for participating. You may now disconnect.

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