Fractyl Health plans 45% job cut to fund Revita FDA submission

A planned 45 per cent workforce cut will concentrate resources on an obesity device as Fractyl Health, Inc. NASDAQGUTS said Thursday it would discontinue internal gene-therapy development. The restructuring extends its forecast cash runway into the second quarter of 2027, beyond a planned Revita FDA submission in late 2026.

Thursday's restructuring announcement follows positive six-month pivotal results announced Oct. 16. Quarterly operating cash burn is expected to fall about 50 per cent, to approximately US$8 million, by the end of the second quarter of 2027.

Fractyl is a small clinical-stage metabolic therapeutics developer based in Burlington, Mass., whose lead candidate is an endoscopic procedure intended to maintain weight loss after obesity medicines are stopped.

Read more: Zealand Pharma reports up to 9.2% weight loss in Phase 2 diabetes trial

Fractyl shares NASDAQGUTS closed at US$1.15 on Nasdaq at 4 p.m. EDT on Oct. 21. That close preceded Thursday's announcement.

Revita Met Its First Weight-Maintenance Endpoint

REMAIN-1 is a randomized, double-blind comparison of Revita against a sham procedure. Its registered protocol specifies that participants first lose at least 15 per cent of body weight on tirzepatide, discontinue it and undergo randomization in a two-to-one ratio.

Fractyl's Oct. 16 readout reported least-squares mean weight regain of 5.1 per cent with Revita versus 8.2 per cent with sham. The prespecified six-month co-primary endpoint favored Revita, with p=0.0023.

The company described a 308-participant pivotal cohort and reported the six-month figures for 176 Revita recipients and 74 controls.

No device- or procedure-related serious adverse events or deaths were reported through the Sept. 24 data cutoff. Related adverse events were predominantly mild and occurred around the procedure.

Revita is designed to remodel the duodenal lining in a single endoscopic treatment. Although it has FDA breakthrough device designation, Fractyl still describes it as investigational in the United States.

Fractyl says the FDA will determine the final regulatory pathway after reviewing the complete safety dataset.

Lower Spending Extends Runway Into 2027

The workforce reduction should be substantially completed by November, according to Thursday's announcement. Fractyl is seeking strategic alternatives for Rejuva, its gene-therapy program, but says a transaction is not assured.

Its Aug. 10 financial update listed approximately US$47.1 million in cash and cash equivalents at June 30. Its previous runway forecast extended into early 2027; the revised forecast includes expected cash costs of the restructuring.

"We expect the capital we have today to be sufficient to fund our planned De Novo submission and upcoming 12-month pivotal data, and we are excited to focus our attention and align our resources behind our near-term opportunity," Fractyl chief executive Harith Rajagopalan said.

The new runway still ends before the company's potential FDA authorization in late 2027 and potential United States launch in early 2028. Those dates remain company projections, leaving the commercial timetable longer than the period its existing cash is expected to cover.

The maintenance field includes Viking Therapeutics, Inc. NASDAQVKTX, which announced an exploratory study on Oct. 6 in approximately 195 adults. Viking is testing tablets and less frequent injections after initial weekly VK2735 injections, while Fractyl is testing a procedure after drug discontinuation.

Read more: Viking Therapeutics begins oral VK2735 maintenance trial in obesity

A broader device-sector benchmark, the iShares U.S. Medical Devices ETF NYSEARCAIHI, traded at US$54.25 as of 9:42 a.m. EDT on Oct. 21.

Fractyl plans its FDA De Novo submission in late fourth-quarter 2026. Expected first-quarter 2027 results will assess the second co-primary endpoint, the proportion maintaining at least 5 per cent total body weight loss at 12 months.