Fractyl Health Stock

All right. Good afternoon, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Ulz, one of the biotech analysts here, and it's my pleasure to introduce Harith Rajagopalan, CEO of Fractyl Health. Just as a reminder, the format for today is a fireside chat. So if anyone has a question, please raise your hand, and we'll make sure we address it.

But before we get started, I just need to read a quick disclosure. Before we get -- for disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

And with that, I'll turn it over to you, Harith, to maybe make some introductory comments, and then we can go into the Q&A.

Sure. So my name is Harith Rajagopalan. I'm the Co-Founder and CEO of Fractyl. Thanks for having us, Mike. We are developing Revita, duodenal mucosal resurfacing for post GLP-1 weight maintenance. We have pivotal data coming in early Q4, just several weeks away for potentially the first therapeutic option that has the potential to deliver a durable metabolic reset for people with obesity and type 2 diabetes.

What that means is the potential for long-lasting clinical benefits in both weight and metabolic parameters even in the absence of ongoing medical therapy. The reason this matters so much is because, as everyone knows, GLP-1s have totally transformed the treatment landscape in obesity, diabetes and metabolic disease. We have nearly 30 million Americans on GLP-1s, but 1 million people discontinue GLP-1s each month. And then when they do, lose the benefits that they had worked so hard for. So the fundamental question in obesity, I think, has now shifted from how do you achieve weight loss, which we're doing very well with drugs to how do you maintain that weight loss for the long term. And that's where we believe Revita comes in with the first potential option in the space.

Revita has breakthrough device designation from the FDA and has a potential de novo registrational filing pathway. And so with pivotal data in hand in early Q4, we anticipate a potential regulatory filing later this year. So it's an exciting time with key pivotal potentially practice-changing data just around the corner.

Yes. So a lot going on near term here and you mentioned the unmet need is very high, so there's opportunity there. And I guess, since Revita's a little bit different, it's a procedure, maybe describe the process, kind of what patients go through and maybe how the how it works, I guess, sort of the mechanism?

Yes. So Revita targets a portion of the gut called the duodenum. It's like the hunger center of your gut. And the reason that that's important is because the duodenum is the first place where nutrients are absorbed in the body, and in people with obesity and type 2 diabetes, nutrient sensing and signaling is abnormal. It doesn't work properly. And we believe that this is a very first thing that goes wrong in people when they develop obesity, and it's the reason why people have obesity and diabetes in the first place.

So what we have developed is an approximately 1 hour outpatient endoscopic treatment with a proprietary catheter-based delivery system that targets this dysfunctional duodenum with ablation, which is targeted energy delivery directly to this diseased tissue to allow the removal through ablation of that unhealthy tissue and the potentially healthy regrowth or regeneration of a new lining that aims to restore the normal nutrient sensing and signaling mechanisms in the body so that people can go back to maintaining a healthier weight even in the absence of ongoing medical therapy.

We believe that unlike pharmacology, which can be very effective, but only works as long as you take it, Revita can actually be a durable metabolic reset by fixing whatever abnormal signaling mechanisms are causing people to have obesity in the first place. That's why we see a lot of potential for it, for the 1 million patients a month who are going to stop a GLP-1 and be at significant risk of weight and metabolic rebound.

But beyond the patients, we think that this answers a problem that physicians have when their patients are asking them, okay, I've lost weight on a GLP-1 or I'm having side effects on my GLP-1. I want to stop, I need to stop, but I don't want to regain all of my weight, what do I do? And I think it answers a question for health systems that recognize the importance and the value of treating obesity, but are struggling with drugs that only work as long as people take them, and the majority of people stopping them within such a short amount of time that the long-term health benefits are not actually realized in the real world. I think Revita can be a very compelling answer for all the patients, the physicians and the health systems.

Since it's procedure, maybe just talk about some of the side effects, these patients experience?

Yes. So Revita is purpose-built to have a very selective ablation of the mucosa without damaging deeper structures. The way we do this is that we first put saline into the wall of the submucosa in order to create a thermal barrier between the mucosa that we wish to ablate and the muscle layer that we don't want to damage because that's where the pain fibers reside and the structural integrity of the duodenum as well. So our ablation is designed to ablate the mucosa and the superficial submucosa, but to prevent injury to the underlying muscle. And as a consequence, in recent randomized trials, we have seen that Revita has essentially the same treatment-emergent adverse effect profile as patients who undergo a sham procedure.

Most patients do not experience any symptoms at all. Those who do have mild procedure-related symptoms, maybe abdominal discomfort or throat discomfort lasting 1 or 2 days, self-limited, resolving on its own. We think it's a mild peri-procedural profile that potentially supports a very broad outpatient use. Because you got to think about this as a transoral upper endoscopic procedure. And we are doing millions of these types of procedures in endoscopy suites across the country today. So what I think is compelling is that the safety profile and the scalability of the technique can actually meet the need of the very large population of potential GLP-1 discontinuers.

Yes. Can you talk a little bit about just the durability you're seeing with the procedure so far? And do you anticipate patients may need to redose in the future or rehab procedure? And what could that look like?

Yes. So we've done studies in type 2 diabetes for many years. We have collected data out to 2 years in type 2 diabetes where patients who've undergone a single Revita procedure have had 2 years of durable glucose improvement, metabolic benefit and weight maintenance for that 2-year period of time. We have just begun to see this summer 1-year data from our post GLP-1 weight maintenance setting. We saw that in 2 different patient cohorts that we've been following. One is an open-label cohort called REVEAL-1, roughly 20 patients. The other is in a randomized controlled setting called REMAIN Midpoint, where that's roughly 45 patients in whom roughly 30 were in the Revita arm. So collectively, we now have about 50 Revita patients with 1 year of follow-up. And the results, I must say, are very encouraging.

Approximately 80% of the GLP-1 weight loss has been retained across these cohorts at 1 year. That's a very impressive number. Because when you think about what happens in natural history or in the control arm in our own trials, patients are regaining 55% to 60% of that weight, continuing to regain weight at 1 year, maintaining 80% weight, instead giving up less than 20% of that weight loss is clinically meaningful, better than what we can see from other pharmacological approaches and maintenance, and we think will be very highly compelling if the pivotal trial continues to show what the pilots have already demonstrated.

Can you talk about some of the other things you've learned from these -- your REMAIN Midpoint and reveal open-label studies as well?

Yes. I'll say that we started 3 trials in parallel. We started the REVEAL open-label cohort. We started the REMAIN Midpoint, which is a proof-of-concept, sham-controlled pilot study. And then we started the REMAIN Pivotal, which is the single registrational study that we believe is necessary for registration. For context, the REMAIN Pivotal is the 1 to focus on. That's the data that's coming in early Q4 and where we've already brought all the patients that are in follow-up have come back for their 6-month visits and so we're in data cleaning right now.

In these 3 studies, we advised endoscopists to ablate at least 10 centimeters of the duodenum, but aim as they develop proficiency with the technique to get to the entirety of the duodenum from the ampulla of Vater to the ligament of Treitz which are anatomical landmarks. In most people, that's a roughly 16 to 20-centimeter length of duodenum that we advise them to work themselves to. The reason we said at least 10 cm is because that's where we found effectiveness in our type 2 diabetes trials. But we thought that more would be better for weight maintenance. We just didn't know how much when we started these studies.

The second thing we said was we're going to enroll patients who have lost at least 15% of their body weight on the GLP-1. The reason we said you got to lose at least 15% of your body weight on a GLP-1 is because it's now very clear from Lilly, Novo and established literature the more weight you lose on the GLP-1, the more risk you have of regaining weight very rapidly. So in order to see a treatment effect in maintenance, we want more weight loss.

We learned from our pilots to refine our sense for those 2 parameters. We found that more than 14 centimeters of ablation was more effective than 10 to 14 centimeters of ablation. We learned that more run-in weight loss, such as like more than 17.5% weight loss was more effective than less than 17.5% weight loss. Here's the thing I would leave you with. The pivotal trial statistical analysis plan is now optimized for those lessons. Our per protocol population are those individuals who have achieved more than 14 centimeters of ablation. That's well over half of our pivotal trial population. And we also have worked with the FDA to define a statistical analysis plan that takes the magnitude of run-in weight loss into consideration for the primary analysis in our pivotal trial. And we believe that with these 2 measures, we are very well set up for a very clinically meaningful effect size from the pivotal trial, which is what we're excited to say. And I'm happy to talk more about what expectations are.

Yes, maybe expectations and a little bit more about the co-primary endpoint and kind of what the bar is on those different endpoints, or combined, what you need to sort of show the FDA to get approval?

Yes. So we have 2 co-primary endpoints. So just let's remind you about the pivotal study and its design and then we'll walk through that. So over 300 patients were randomized. They all had achieved more than 15% weight loss on tirzepatide over a period of 20 to 30 weeks. They discontinued their tirzepatide and then that was their baseline pre-randomization visit where their weight was measured. And then 1 week later, they underwent their randomization procedure. They were randomized 2:1 to either Revita treatment of at least 10 centimeters of the duodenal mucosa or a sham procedure where the catheter is introduced, but wasn't activated. Patients remain blinded to their treatment allocation and the assessors of the primary outcome measurements of weight also remained blinded.

So the only person who knew whether they got the treatment or not was the actual performing interventionalist who was not actively involved in their care after that randomization procedure. So a true double-blind. The co-primary endpoints here are effectively an efficacy endpoint at 6 months, which is what is the rate of regain in the Revita arm compared to the sham arm at 6 months. That's what we're going to see in early Q4. And the second co-primary endpoint is effectively a durability responder analysis, which is what proportion of Revita patients maintain at least 5% total body weight loss 1 year after the discontinuation of GLP-1.

What do we need to show? We need the pivotal trial to have a statistically significant difference in the 6-month efficacy endpoint. We also need the durability endpoint to demonstrate that at least 50% of the Revita patients, just in the Revita arm, maintain at least 5% total body weight loss from their pre-tirzepatide levels. What we saw in the midpoint cohort when we performed our analysis in the same way as we will in the pivotal is a result that would have been highly statistically significant in a 300-patient positive -- of 300-patient pivotal trial and on the efficacy endpoint. And on the durability endpoint, we saw over 70% of the patients met that responder analysis at 1 year compared to the 50% threshold that the FDA would require.

Okay. Makes sense. I guess we talked about ablation length and the percent from baseline weight loss, which are 2 important factors. But anything else in terms of like differences in the trial design or patients enrolled in the study versus some of your prior Midpoint or other endpoints that might influence the outcome?

Well, one of the benefits of starting these studies concurrently is that we are able to do them all under a single IDE, same protocol, same site, same investigators, same inclusion/exclusion criteria, same physicians performing the procedure. So that allows us to have a lot of consistency from the pilot all the way through to the pivotal. So the lessons we believe can give true read-through.

The only key difference actually sways in the favor of the pivotal with respect to run-in weight loss, where there's more average run and weight loss in the pivotal than there was in the pilot and on ablation length, where there was more ablation length on average than there was in the pilot. So both of those skew in favor of Revita's efficacy potential.

Makes sense. So you'll share the data early 4Q and then maybe talk about next steps from there once you have the data?

Yes. I mean I think I would say -- let me just say that the primary endpoint is in the intention-to-treat analysis. And the goal there is to demonstrate a statistically significant result. The enrichment subgroups are those patients who had higher run-in weight loss on average and in those who had more ablation length on average. And our goal in those enrichment subgroups is to be able to show more than a 50% reduction versus sham in the rate of regain at 6 months. I think that would be a highly clinically impactful result. If we're able to see that, we'll have topline data in early Q4.

Our plan is to submit all of our device manufacturing, our design history file and our 6-month data by early Q4 -- by late Q4 with the FDA as part of the de novo pathway and then to follow up with our 12-month data in Q1. So that leads you from Q4 to Q1. The de novo pathway is roughly a 150-day review process with some time for questions in between. So call it, 6 to 9 months of a review cadence on average. So if all goes well, that means potentially FDA clearance in the United States by late 2027, enabling an early 2028 launch.

Can you talk about maybe the advantages of de novo, and you touched on some of them already.

Yes. I mean when we started this process, this sits in the device side of the house. So this is CDRH. And CDRH for novel devices has a de novo pathway for what's called Class II for low-to-moderate risk and as a PMA pathway or Class III for high risk. We started off in the PMA pathway, but the FDA has reviewed the totality of our safety evidence along the way and has given favorable feedback on that safety. Gives us confidence that we should follow where the dialogue with FDA has gone. We are pursuing the de novo pathway, and we have confidence in that.

That's a more efficient, faster, more streamlined process. It establishes Revita as the definition of the category, what's needed for approval through de novo special controls for anything else that might follow, but it also accelerates label expansion and product improvements relative to the PMA. So there's a lot of advantages we see in it.

Yes. So for de novo, you start the process with the 6-month data, and then you need to follow it up with 12 months in order to get kind of the approval? Is that part of the process?

We think that the FDA is going to want to see both of the co-primary endpoints. And the plan will be to deliver all of that as soon as it's available.

Okay. Got you. Let's talk a little bit about the commercial strategy and plan. You recently hosted a day of commercial data to kind of focus on the plans there. So maybe just walk us through some of those key takeaways.

Sure. We hosted an Investor Day, and for those who are interested in learning more, you can visit on the IR section of our website on September 1. What we laid out, I think, is a very compelling argument for how Revita may be able to launch into established centers of excellence that have patients on the GLP-1 who are currently looking for an off-ramp, where physicians have literally everything they need to be able to offer these patients Revita other than the Revita devices and training itself.

So we have a plan for a targeted and efficient center of excellence launch. In the first 3 years, we target 100 to 200 of the top centers out of a total of 1,000 in the United States. Each of them has roughly 2,000 patients today on GLP-1s, and the metabolic interventionalists who would perform this procedure are clearly seeing that their patients are looking for a way to be able to maintain body weight loss without having to stay on these medicines for the rest of their lives. Physicians are motivated not only clinically but economically because the procedures can be profitable for them and for their hospitals and can help them fulfill a clear unmet need in the space as we've been talking about for the past 20 minutes.

What's nice about it is this group of doctors are a nameable list. It's a totally manageable group of people to target with the sales force in the tens of people, not hundreds. We know many of them already well by name. They reference one another in their buying decisions and Revita DMR is something that they're very well aware of and they're excited for the data that are coming. And for those who are interested, I would point you to our -- the transcript or the webcast of our Commercial Strategy Day because one of these physicians based in Dallas talked about his experience caring for over 2,000 patients a year on a GLP-1 and what he is seeing that they are looking for.

If you ask an obesity medicine doctor or an endocrinologist about unmet needs in obesity, you'll hear about costs and access. You'll hear about tolerability, you'll hear about potency because those physicians prescribe medicines. But if you talk to our metabolic interventionalists, they not only prescribe medicines, but they also perform interventions to manage obesity and metabolic disease, and they offer, therefore, a much more comprehensive view on what patients are looking for. So yes, they will name those things as unmet needs, but they will also say that most of my patients do not want to and cannot conceive of staying on these medicines to manage their weight for the rest of their lives and they need a way to lock in those benefits without chronic pharmacotherapy. And so these physicians, and one of them was featured in the Investor Day that we held, I think clearly understand what patients want and Revita can really answer a huge need for them.

Yes. How do you get those patients sort of identified and then funnel them through sort of these clinics?

So let's just say, there are roughly 1,000 accredited bariatric centers of excellence in the United States. They are accredited by the Medical Society, ASMBS. That -- you can go to their website, you can see the list of those 1,000 centers. The top 100 to 200 are doing the majority of these cases. And in those 100 to 200 centers, there are already about 2,000 patients that they are managing annually within that practice, where surgeons and their -- and interventionalists, their NPs, PAs and other associated physicians are managing weight loss journey for their patients.

They're sitting right there in those clinics. And right now, there's like a 6- to 8-month waiting list for them to be able to see additional patients, which I'm sure you're hearing elsewhere as well. So the core question is how can these physicians serve more patients and how do they solve a problem that these patients want weight loss medicine, but they don't want weight maintenance medicine. They want weight maintenance without medicine. And so this allows them to be able to really increase their throughput, to be able to offer not only induction, but then a maintenance intervention that allows those patients to go back and lead a life that doesn't require the constant management of GLP-1 ongoing care.

That allows more patients to come into the practice from the waiting list, I don't believe -- this is not a market creation exercise. It is actually a market fulfillment exercise. These physicians already have NPs and PAs who are prescribing the GLP-1s. They have the nutritionists within their own practice. They have the prior authorization machinery in place. They have the endoscopic skill set and the endoscopic mindset to be able to intervene when patients are looking for an alternative to medicines. And they also are participating in a society-led registry for long-term outcomes in weight management outside of medicines. So literally, everything that we would want in a check box for a center of excellence these guys already possess.

Can you talk a little bit about just the training involved since it is a procedure? What's the time frame on that?

Yes. So Revita has several advantages as a procedure by design. The first is it leverages the skill set that these physicians have already gathered through other procedures that they have either routinely do or they have -- and/or have trained in. So we're not asking them to do something that is complicated that they are learning to do for the first time. We're asking them to apply familiar techniques to a portion of anatomy where they have not applied that technique before. That's why it takes about 4 to 5 cases in our pivotal trial for patients to get -- for physicians to get comfortable performing the procedure, ramping up to that full ablation length that we talked about earlier. And that's why we believe that this is a highly scalable intervention as well, leveraging existing skills.

Now what makes it attractive to patients is that it doesn't alter their anatomy. They don't think of this as surgery. We're not rerouting things. We're not suturing things. We're not putting an implant in their body. We are merely treating a diseased section of their gut and allowing their physiology to improve. That's highly attractive because it feels to patients like you are actually targeting a root cause of their disease for the very first time.

Makes sense. Can you talk a little bit about just your thoughts on pricing and how you came to those sort of thoughts?

Sure. Well, we think about it, it's too early for us to disclose the price, obviously, but we think about the pricing corridor in which we reside. There is a particular endoscopic intervention called ESG. That's reimbursed at roughly $11,000 today. And then you have bariatric surgeries that are reimbursed up to like $33,000. And so the way we think about our ASP is within that corridor, call it, $10,000 to $30,000 of an ASP.

We hired in June, Mike Zumdahl, who is Head of Commercial Strategy and Market Access. He took the 50 patients that we have at 1 year, plugged it into a health economic model, started to build out the health economic value proposition, which we will, of course, refine with full pivotal data over the coming quarters. What we are seeing so far is highly encouraging. At the lower end of that corridor, we see Revita as being potentially cost-saving to the system. Even at the upper end of that corridor, we see it as being highly cost effective compared to bariatric surgery and other interventions that are otherwise already reimbursed by payers. So we feel like there's a strong justification across that entire pricing corridor.

Makes sense. Maybe we can shift gears a little bit to Rejuva, maybe give us a little bit of background there, where you are in that program?

Yes. I mean, as a company, we believe very deeply in how do you provide patients the potential for lasting metabolic benefit. Because I believe that, that is really what the market needs desperately. There's a lot of therapies out there that work while you take them, but most people don't take them long enough or well enough for it to actually give them long-term benefit. So what do you do for people who need to stop or want to stop a GLP-1, that's what where Revita comes in.

But what about people who want long-term GLP-1 are benefiting from it? We have Rejuva, which is a potentially once-in-a-lifetime GLP-1. And it's a smart GLP-1. It's nutrient-responsive, delivered by a local administration of gene therapy into the pancreas and just to set the stage appropriately, this is still preclinical, but a CTA has now been cleared in Europe, and we have ethics committee approvals in Australia, 4 sites have been activated. Patients are now being enrolled. We anticipate dosing the first patients and seeing preliminary feasibility and safety by the end of the year.

The simple idea is what if you could allow the pancreas to make GLP-1 at the site where it's needed most to treat type 2 diabetes to help keep the beta cell alive, but to be released locally at low doses in a nutrient responsive manner. Can we achieve durable remission of type 2 diabetes with a single administration of this therapy? That's the target product profile we're going after. We think it will be highly attractive to patients who are otherwise facing the need for chronic medication escalation and disease progression.

We're trying to turn the disease around. And if successful in type 2 diabetes, as we pursue the profile optimization, can it also begin to work as a durable solution, can it also serve as a durable solution for obesity as well. That's something we'll be excited to see in the coming quarters.

Yes. Great. Maybe you can talk about current cash position kind of the runway, and how you think about that?

Yes. At the end of Q2, we reported a little bit less than $50 million of cash on hand. We've said that we have data coming in early Q4, a registrational filing in late Q4. We have cash through all of that and into early '27. We have roughly 5 to 6 months of cash on hand beyond our anticipated pivotal data readout. What the Commercial Strategy Day allowed us to articulate is that we think it's possible to get profitable in about 5 to 8 quarters from launch, and under a wide variety of quite conservative estimates on launch scenarios. And so while there are certainly options for non-dilutive ways to be able to fund the business to be able to achieve those objectives.

We also think that a relatively like constrained amount of capital would allow us to be able to get to profitability in 5 to 8 quarters. And once we have pivotal data in hand, we'll be looking to explore all of that.

Yes. Makes sense. Maybe in the last few minutes here, I can ask a couple of survey questions we've been asking all the biotech companies. It's kind of along different themes. So there's 3 questions here. So the first is how has the rise of China-origin innovation sort of changed your competitive positioning and your R&D versus BD playbook?

We are seeing in devices what people are also seeing in the world of drugs that there are clearly -- there's a lot of innovation in China. There's a lot of support for that kind of innovation. It's expanding where we are looking in terms of potential tuck-in or other sorts of opportunities or competitive opportunity depending on how the landscape evolves. So whereas in the past, I don't think we would have looked to China as competition. I do think we have to start paying attention to it.

Makes sense. Second question is, are you implementing AI adoption? And if so, where has it already changed the decision, time line, cost or probability of success? And what measurable evidence should we expect over the next 2 years, let's say.

We're implementing -- when my team saw this question, we all chuckled because I've been a strong proponent of implementing AI across the organization. I see it in 2 different ways. One, obviously, is in the efficiency of doing the work that we would otherwise do. Second is enabling us to do things that we could not have otherwise done without AI. In the former category, we are all in with safeguards on using AI in order to improve the efficiency and the quality of the work product. You've heard many major pharmaceutical CEOs talking about how it's speeding up regulatory filing time lines speeding up data analysis. And yes, we are using it in all of those ways and have been doing so now for several quarters. And I think you've seen that in the efficiency of our business and capital outlay over the course of the last several quarters.

We're also using it to do things that we otherwise couldn't do. So for instance, when -- in our Rejuva gene therapy program, we have AI-generated DNA sequences that have shown some very interesting potential for some of the next-generation candidates that we're looking at internally. We see that the predictive nature of -- well, the leveraging of existing genetic databases allows AI to make smart choices on how to optimize genetic sequences for efficacy and safety in pretty intriguing ways. We'll have more to say about that in the future.

Okay. Interesting. And then maybe third and last survey question, I guess, which policy variable, whether it's FDA, Medicare negotiation, tariffs or global pricing, matters most to your economics? And what have you changed, if anything, because of it?

Yes. So I would say CMS, CMS, CMS. Okay. On one hand, CMS has established this GLP-1 bridge program. As of July 1, they are covering GLP-1s for obesity. Eli Lilly is running ads on football I saw yesterday and over the weekend for the GLP-1 bridge program. I anticipate 4 million to 5 million Americans are going to be on GLP-1s in the CMS population by this time next year. And the Congressional Budget Office estimates that 2/3 of them will discontinue the GLP-1 within 1 year, 80% within 2 years.

So I think that, that push is going to mean that Medicare is going to be paying for GLP-1s for good because there is no alternative once you start putting these people on these medicines to just take it away from them if you're Medicare. What that means with all of those discontinuers, particularly in the elderly population, where a greater risk of bone loss and frailty, is that an off-ramp is going to be an essential part of the treatment armamentarium, which is where we believe we come in.

So the second thing on CMS, other than the GLP-1 bridge program is how they're working to establish early national coverage for breakthrough devices. Revita is a breakthrough device, we believe it fits an unmet need that is highly important to Medicare, as we just talked about. And so early coverage could really be a major unlock for our commercial model. It's not contemplated in what we proposed in our September 1 Investor Day. But if early coverage were to come to fruition, we believe that could be a major opportunity for us.

Okay. Great. Looks like we're out of time. Why don't we end it there, Harith? Thanks so much, we really appreciate it.

Thank you, Mike. Appreciate it.

Good morning, and welcome to the Fractyl Health Commercial Strategy Day. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be available on the Fractyl Health website following the conclusion of the event. I will now turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyl Health. Please go ahead, Brian.

Good morning, everyone, and thanks for joining us. I'm Brian Luque, Head of Investor Relations and Corporate Development at Fractyl Health. Today is our Commercial Investor Day. Our purpose this morning is to walk you through how we intend to commercialize Revita, our investigational procedural therapy for post-GLP-1 weight maintenance, assuming we're successful in our pivotal trial and in our regulatory submission.

Before we begin, I'll turn to the legal disclaimer. During this presentation, we'll be making forward-looking statements, including statements about the timing and results of the REMAIN-1 pivotal cohort, our regulatory strategy and the potential use of the de novo pathway, coding, coverage and payment, the timing and content of a potential commercial launch, our expected financial performance, the potential sales and estimated total addressable markets currently and in the future for our product candidates, the potential time line for profitability following the launch of Rita and our cash runway. These statements involve risks and uncertainties that may cause our actual results to differ materially.

A discussion of those risks is included in our filings with the SEC, including the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2025, filed on March 24, 2026, and our quarterly report on Form 10-Q for the quarter ended June 30, 2026, filed on August 10, 2026, which I encourage you to review. Forward-looking statements speak only as of today's date, and we undertake no obligation to update them.

I want to be clear about 2 things at the outset. Revita is an investigational device. It is for investigational use only in the U.S. and a CE Mark in the EU and the U.K. FDA pre-submission feedback is advisory and nonbinding, and there is no assurance that the FDA will accept the de novo marketing application or that Revita will receive marketing authorization. And the REMAIN study database has not been locked as this is an ongoing study, so the data are subject to further cleaning and validation.

You'll be hearing from 4 speakers this morning. Dr. Harith Rajagopalan, our Co-Founder and CEO, will start with the problem we are solving, the opportunity and the evidence we've generated thus far. We are then delighted to be joined by Dr. Folahan Ayoola. Dr. Ayoola is a Medical Director of Bariatric Surgery at Texas Health. He will give you the view from inside a metabolic practice on the unmet need in post-GLP-1 patients. Mike Zumdahl, our Senior Vice President of Market Access and Commercial Strategy, will then take you through our Center of Excellence strategy and our market access plan. Mike joined us in June from Inari Medical, where he built global reimbursement and health economic infrastructure for a breakthrough procedural therapy through its acquisition by Stryker last year for nearly $5 billion. And Lara Smith Weber, our Chief Financial Officer, will close with the commercial model and the path to profitability. Following prepared remarks, we'll be happy to take your questions.

With that, it is my pleasure to hand it over to Harith.

Thank you, Brian. Good morning, everyone. In July, we shared 1-year randomized data from the REMAIN-1 midpoint cohort and why we have conviction in Revita for the large post-GLP-1 weight maintenance opportunity. Today is a different conversation about the potential market opportunity for Revita in post-GLP-1 weight maintenance. 6 key points. The unsolved problem in obesity is now maintenance, not weight loss, and there is no approved off-ramp. We have randomized and open-label data showing a durable signal with 6-month top line from the 300-plus patient pivotal cohort expected in early Q4. That study is built to support a potential de novo filing in -- late in Q4 on a Class II path. The commercial build is activation, not market creation. The payment work is already in motion, and we believe a focused center of excellence launch can reach profitability 5 to 8 quarters after launch.

Let me start with the problem. There are roughly 29 million people in the United States on a GLP-1 for weight loss today. These drugs work. They have changed what patients and physicians believe is possible. But look at the curve on the right. This is Lilly SURMOUNT-4 study of tirzepatide discontinuation. Patients lost about 20% of their body weight during the lead-in. Those switched to placebo went straight back up and we're still gaining at 1 year. That pattern has been consistently seen across studies with almost all weight regained by around 18 months. And because patients regain fat faster than muscle they lost, body composition worsens on the way back up.

To a patient, the consequences are severe, not only weight regain, but also metabolic rebound and the psychological turmoil of having lost the weight and then gained it all back. Roughly 85% of patients regained the weight they lost. There is no FDA-approved therapy for post-GLP-1 weight maintenance. And as newer drugs become more potent and more accessible, we believe that gap will only widen. It is estimated that over 1 million patients discontinue with GLP-1 each month in the U.S. The pattern is consistent, initiation, weight loss, then discontinuation driven by cost, side effects or access and then rapid regain with 2/3 of the lost weight back within a year of stopping. This is a systemic pattern, not individual failure, and it is the single largest unaddressed problem in obesity care today.

Let's consider a typical GLP-1 patient. She lost nearly 50 pounds on a GLP-1, but her weight loss has plateaued, and she wants to recover the energy to sit on the ground and play with her grandchild. She asks her physician, do I have to stay on this forever? Will the weight come back? Unfortunately, today, the answer is yes. There is no durable nondrug off-ramp. Revita is a single one-time outpatient endoscopic procedure that ablates the duodenal mucosa like LASIK for obesity. The duodenum is where nutrient sensing goes wrong after chronic high fat, high sugar diets, and Revita is designed to ablate that damaged tissue and allow healthier mucosa to regenerate.

Revita holds FDA breakthrough device designation for weight maintenance in patients discontinuing GLP-1 therapy. It is designed to complement lifestyle changes and pharmacology, not replace them, and it is protected by a robust IP portfolio covering thermal and nonthermal ablation approaches. The catheter is placed through the mouth over a guidewire while the patient is asleep and the length of the duodenum is treated by a repeated sequence of circumferential saline lift and then precisely controlled hydrothermal ablation at each lift site along more than 14 centimeters of post papillary duodenum.

There are a few aspects of this procedure that make it a potentially scalable option for a broad population and attractive to physicians. First, the procedure uses skills an advanced endoscopist already has. Second, and critically for patient acceptance, it does not alter the patient's structural anatomy. Nothing is resected, implanted or sutured, no restriction is created and patients go home the same day. Third, it does not close the door on any other option from diets to drugs to other procedures. Our clinical program is a stepwise validation run under a single IDE built to support a potential de novo submission late in Q4 of this year.

Three cohorts, REVEAL-1 is our open-label real-world cohort, 1-year data came in Q2. The midpoint cohort is our randomized double-blinded sham-controlled pilot of 45 patients with a tirzepatide run-in, randomized 2:1. We reported 1-year data in July. And the pivotal cohort is the same design, the same population and the same investigators at over 300 patients. Here's what those first 2 cohorts have shown. REVEAL-1, open-label real-world dataset, 22 patients enrolled who had already lost at least 15% total body weight on a GLP-1 and wanted to come off. At 1 year after a single Revita procedure, participants retained approximately 78% of the total body weight loss achieved on their GLP-1. That is open-label real-world data. But what does it look like in a randomized setting? In the midpoint cohort at 1 year, up to 84% of GLP-1 induced weight loss was retained with Revita versus 46% with sham in patients who received complete duodenal ablations. And the pivotal cohort is the box on the right, top line 6-month data early in Q4 expected, top line 1-year data in the first quarter of 2027.

As an illustrative example from the midpoint cohort, a participant spent 5 months on a GLP-1 and lost 44 pounds. Then the drug was stopped. One year later with no GLP-1, a sham patient is back up at 199 pounds on average, regaining 23 pounds, holding on to less than half of what she lost. The Revita patient is at 184 pounds. She has regained only 8 pounds. These are mean results in the complete ablation population. We will soon see how these results translate when we read out our pivotal cohort in early Q4. Safety is the other half of the story. Through 12 months in the midpoint cohort, there were no device-related serious adverse events, and all 4 related events were Grade 1, occurred on the day of the procedure and were transient. We have never seen a late adverse event from Revita. This is a mild periprocedural profile. It is consistent with prior studies of Revita, and it is what we believe supports outpatient use at scale.

Now to the pivotal. Adults with obesity, BMI 30 to 45, GLP-1 naive without type 2 diabetes, randomized 2:1, Revita versus sham, double-blind sham controlled, tirzepatide administered to achieve at least 15% total body weight loss and then discontinued, diet and lifestyle counseling runs throughout the study. Two co-primary endpoints, percent total body weight regain versus sham at 6 months and a responder rate, the percentage of participants who maintain at least 5% total body weight loss at 12 months. The most important thing about this study is how closely it mirrors the midpoint cohort you just saw, same design, same population, same enrollment criteria, same investigators, same protocol in a larger, well-powered forum. Both co-primary endpoints are very well powered for pivotal success.

On the first co-primary percent total body regain at 6 months. Our base case is a sham regain of 11.6% against which Revita would need to come in at or below 9%. What we observed in the midpoint cohort was 5.1%, a meaningful, statistically significant reduction in regain in the Revita arm versus sham, particularly in participants with longer ablation lengths or higher run-in weight loss is what we believe a successful readout looks like. On the second, the responder rate, the prespecified performance goal agreed with FDA is 50% of patients maintaining at least 5% of their total body weight loss at 12 months. In the midpoint cohort, that figure was 73% in the intent-to-treat population and over 90% in the complete ablation cohort. These are model-based estimates from an exploratory analysis of the midpoint cohort, which was not powered for formal inference.

Now turning to regulatory. We received favorable pre-submission feedback from FDA in March. The agency indicated that the safety profile of the Revita DMR system is consistent with the Class II de novo device classification. Final determination on regulatory path will be made once the FDA has the opportunity to review the safety data from the pivotal study. We are optimistic about the de novo pathway. We see one pivotal study as a registrational package and a successful de novo makes Revita the reference device for the category, creating the predicate for future 510(k)s under defined special controls. We intend to begin our de novo marketing application in late Q4 2026. Assuming the pivotal data are favorable, we believe we will be in a position to submit the regulatory package.

Let's walk through its time line and milestones. After we file, there is a short acceptance review, then substantive review with the clock stopping while we respond to FDA's additional information requests. Then potential -- post potential clearance, roughly 4 months of launch preparation, the transitional pass-through application, hospital contracts, console placement and initial physician training happened during that time. This is illustrative. These durations are our assumptions, not FDA commitments. The timing of pass-through coverage and launch is not assured, but it governs our planning, and it is why we feel urgency to do the commercial preparation now. The post- GLP-1 weight maintenance opportunity is large, urgent and a white space. Step 1 is what we are proving out now, maintenance after GLP-1, an off-ramp that preserves weight and metabolic benefit after discontinuation. Beyond that, we see further opportunities consistent with where physicians themselves see unmet need, which is why we believe Revita can become a backbone therapy in obesity.

With that, I would like to turn the microphone over to Dr. Folahan Ayoola. Dr. Ayoola is Medical Director of Bariatric Surgery at Texas Health & Flower Mound, north of Dallas. He is a fellow of the American College of Surgeons and of the American Society for Metabolic and Bariatric Surgery, and he runs an accredited metabolic program managing large panels of patients on GLP-1 therapy and patients considering procedural intervention. We asked him to speak to the perspective of a practicing physician who sees this problem every day. He has no financial relationship with Fractyl and no prior involvement in our clinical studies.

I would rather you hear about it from him than from us. Dr. Ayoola?

Thank you so much for that introduction, Harith. Good morning to everybody. Glad to be here. So as Harith said, I am a bariatric surgeon. I'm here in North Texas, DFW Metroplex. And I run a comprehensive bariatric program. What that means is we do lifestyle changes with diet and exercise. We prescribe medications, whether IV, GLP or subcu GLP or pills. I also do surgery. I perform all operations, lead gastrectomy, gastric bypass, duodenal switch, et cetera. And I've been doing that for about 14, 15 years now in North Texas. The program that I run at the hospital is a center of excellence has been that for 10 years. I built that program de novo at that hospital. We're very proud of the work we've done over the last 10 years.

So in my practice, we were performing anywhere from 300 to about 350 cases a year, which is typical for a busy private practice surgeon in DFW. About 45% to 50% of my cases were sleeve gastrectomy, about 45% were duodenal switches and the rest were gastric bypass cases. This is relevant because -- when GLP came out, the cohort that suffered the most or you saw go away were the sleeve cases. And so, for me, almost 50% of my volume was gastric sleeve. And so that was what kind of disappeared, honestly, once the GLP medications became mainstream. So I went from about 300-plus cases to about 150-plus cases. And I know my colleagues that only did sleeve gastrectomy basically went out of business insofar as bariatric surgery was concerned. They had to find something else to do. And so that's the impact GLP medications have had on our discipline. You saw that as well nationally. Procedures fell from 270,000 in 2023 to below 200,000 in 2024. And so some programs actually closed up because of that.

We see that trend continuing. Patients today that come in want GLP medication. I have about 2,000 patients on my panel alone. We will see about 50 patients every week coming in for GLP drugs and maintenance. And so that is certainly something that's continuing. The problem is when I speak to patients early on and they say, I hear about these medications, I would like to get on them. When I tell them that they have to stay on it for life to maintain their weight loss, some of them actually have their faces drop because they really didn't come in expecting that. They think they're going to take it, care of their obesity and be able to move on.

And so when I tell them that's not what the facts bear out, some of them don't believe me, they're in denial. They just think they're different. They're going to take the meds, they'll be cared and they can come off. And as you would expect, I see problems in the future for those patients that believe that. And some of them walk out and say, well, I don't want a temporary solution to my weight. I want a more permanent option. I offer them surgery. Some will take me up on that and others don't. So very few understand this is something they have to take lifelong if they want the benefits. But most patients really just want to break the chains of being on weight loss drugs forever. They want to lock in the success of the GLP medications once they achieve their goal weight.

This is why I got excited about Revita the first time I heard about it because it really does address a significant need. GLP patients, patients on GLP drugs really want to lock in the weight that they've lost. And we know that it being an endoscopic procedure, we have the capacity to do 400 to 500 of these procedures a year once this is approved. We already have the endoscopy suite. We already have fluoro. We already have all these things ready. We already have the patients that are interested. And so things are already kind of set up to really segue into this. And so I got really excited when I saw it.

The other thing is I feel like the same way GLP medications reduced our surgical volume, but actually increased our overall clinic volume is the same way I think Revita has the potential to have more patients actually start the GLP-1 drugs, the ones that would have walked away and more patients kind of turn into this. If you think about it, the data says 40% of U.S. adults are obese, that translates into, I believe, 100 million people. When you look at our surgical numbers, we're doing 200,000 patients' procedures a year. We are doing 0.3% of the volume we would need to do.

We always joke about how if every bariatric surgeon operate at 24/7 every single day, every year, we don't have enough surgeons to actually scratch the surface of the problem. And the problem wasn't getting better, was actually getting worse as the trajectory kept increasing. It's only plateaued recently with the GLP-1 medication being so mainstream. I think when you lock something like that in with Revita, you also now have the option and the opportunity to not only plateau this problem, but start pushing it back down, which will be the first time we've ever done that in decades. So it's not an understatement to say if everything pans out, this is very exciting and a great opportunity for our patients.

So again, it's not a trade of your surgical volume. It's really expanding what we're doing. And as surgeons, we've been trying to get people to have surgery and take care of this problem, but people just push back. They're afraid of surgery. So having something that's endoscopic, not altering, I think, will be more palatable for a lot of people and has the opportunity to grow our treatment options in treating patients suffering with obesity and struggling with this problem. So again, I'll close with the fact that what we need now once this is approved, is training on it, coverage from insurance and so on and looking at our scheduling capacity and expanding that to incorporate this procedure into our practice. I think it does have a really great place in the management of obesity.

And with that, I will turn back over to Harith. Thank you.

Thank you, Dr. Ayoola. We may get some questions for you later on, so I would appreciate you staying on the line. Over the years of our development, we've gotten to know many physicians like Dr. Ayoola, who face a similar unmet need for their patients, managing individuals who are coming to them because they are on GLP-1s are actively looking for alternatives, don't have an off-ramp today, don't want surgery, but also don't want to stay on the medicines for life. These physicians possess not only the patients and their panels, but also the necessary procedural skills and infrastructure for Revita.

Mike, over to you to discuss how we plan to fulfill this present market need in their practices.

Thank you, Harith, and thank you, Dr. Ayoola. I joined Fractyl in June from Inari Medical, where I spent over 5 years building global reimbursement and health economic infrastructure for breakthrough procedural therapies. I've seen what makes these launches successful and how reimbursement and market access are integral components of a targeted and efficient center of excellence commercial strategy. I believe Revita has an unusually favorable profile for a new market entrant. Most new device launches are market creation exercises. You have to find the physician, convince the physician, build the service line, create the referral pattern and then teach a hospital how to get paid. That's a time-consuming exercise and it's expensive.

Revita's opportunity in post-GLP-1 weight maintenance is not that. This is a potential market activation and market fulfillment, built on several tailwinds in the market. There are 4 things that we have to do, and all 4 of them start with an existing base of relationships we already possess. Number one, open high-quality centers. These high-volume metabolic centers already exist today and are built for Revita. Number two, select appropriate patients. Highly motivated GLP-1 discontinuers are already sitting in these interventionalist clinics.

Patients, many of them do not want to remain on a GLP-1, but they also don't want to have anatomy altering surgery. And right now, there's no alternative. Number three, perform great procedures. We leverage an existing interventional skill set that is commonly held among these metabolic interventionalists and a validated training program from our clinical development program that has already demonstrated consistent outcomes and technical success without significant safety concerns. And number four, secure payment. And this must align with the health economics for patients, providers, payers and for Fractyl.

Let's walk through each of these in turn. The post-GLP-1 opportunity is massive, no matter how you slice it. Roughly 29 million U.S. adults are on a GLP-1 for weight loss, and that is from Gallup 2026, which is about 11% of the 262 million adults in the U.S. And there are similar estimates from the Kaiser Family Foundation as well, backing this up. Of those, about 65% discontinue within 12 months. And that is from the JAMA Network Open real-world persistence data that Harith referenced. That gets you to about 18.8 million people per year. Of those, we modeled 30% as having achieved at least 15% total body weight loss before they stop. That is our base case, and it comes out of a Monte Carlo simulation with existing agents in the market today. That gets you to about 5.7 million. And then the eligibility on-label BMI 30 to 45 takes about 70% of that, which is about 4 million eligible patients per year. At a procedure price between $10,000 and $30,000, that is a $40 billion to $120 billion total addressable market. This TAM frames the size of the opportunity.

Now let's get to how we access it. Our 2 primary constraints are how fast we can activate centers and how quickly we can establish broad coverage. Dr. Ayoola just described his ASMBS certified center of excellence from the inside. He has almost everything he needs, comprehensive metabolic program. He already manages thousands of GLP-1 patients, many of whom do not want to stay on a GLP-1, but also don't want bariatric surgery. He has an obesity medicine and ATP in his practice to extend his reach. He has nutrition and lifestyle counseling on staff. He controls the necessary prior authorization machinery to work through reimbursement coverage. He has ample endoscopy and fluoroscopy suite time because his bariatric surgery volumes have been negatively impacted in the last several years. He has spent his career developing the interventional skill set and the interventionalist mindset. He is an ASMBS center of excellence, and he has the clinical infrastructure to support post-marketing registry participation. All of this infrastructure exists today in hundreds of centers just like Dr. Ayoola's all across the U.S.

Now look at the right column. What's missing? One item, an approved, reimbursed durable off-ramp procedure that enables patients to make the progress that they're trying to make in their obesity journey after GLP-1-induced weight loss. That is the whole thesis. We are not building a market. We are supplying the one missing component to a market that's already been built, staffed and accredited by the medical societies. We are planning to target and focus on a center of excellence launch into centers just like Dr. Ayoola's. There are roughly 1,000 accredited centers across the U.S. listed on the ASMBS website. This is a concentrated geographically identifiable footprint, and it overlaps heavily with the metropolitan areas where post-GLP-1 population is densest.

Our early launch targets the top 10% to 20% or roughly 100 to 200 centers. The first wave includes our own REMAIN-1 clinical sites and established centers of excellence where we already have relationships with the physicians. The reason this matters commercially is that this is a nameable list. We know who they are, and we can call them by name. We won't be targeting all of these centers right from the start. We intend to go deep before we go wide. The first phase in year 1, 30 to 50 of the highest readiness centers of excellence, trial sites and centers we're already in dialogue with. The work in Phase I is training, pathway integration and economic proof. We need these sites to run the procedures well and to get paid, and we need to continue to build real-world evidence that will kickstart the flywheel for broad coverage and label expansion opportunities.

Next, in year 2, we expand to 60 to 90 centers. The early sites become regional training and referral hubs. This phase is replication of a proven pathway as we grow within geographic footprints defined by our commercial field sales organization. Then in year 3 and beyond, we expand to 100 to 200 centers at scale, representing 10% to 20% of the potential center distribution, broader rollout as the procedure becomes routine and coverage solidifies. When I was at Inari, we launched at many more centers in the span of this time than what is contemplated here because there are fewer VTE patients and they are not as readily accessible as the GLP-1 discontinuers. We believe that we are modeling for post-GLP-1 weight maintenance is conservative and achievable, but allows us to have high touch and early launch focus on the clinical success and key proof of Revita's value to the market while generating substantial revenue, which Lara will cover shortly.

Now let's discuss the physicians at these centers. Our customer is the metabolic interventionalist, a proceduralist who already treats obesity with procedures and who also manages these patients in clinic. Some of them come from advanced GI endoscopy like Dr. Thaker, who joined our data call in July. Some of them, like Dr. Ayoola come from bariatric surgery. We estimate that there are between 300 and 400 GI endoscopists with active bariatric practices and 2,000 to 3,000 bariatric surgeons. These are company estimates of the addressable operator pool, and they align with publicly available information on metabolic interventionalists and bariatric and metabolic procedural expertise.

Three things follow from that. First, these physicians already have the patients in their practice who are seeking new options for their obesity. These physicians understand the patients and their wishes and can have what I believe is to be the first truly informed shared decision-making conversation with these patients about their treatment options and obesity across the continuum of care. When you ask a prescriber, such as an endocrinologist about weight maintenance, you get a prescriber's answer, another script, managed for life. Our customers with the patient sitting right in front of them is asking a different question. Not which medication comes next, but how do we fix the root problem and let the patients go on with their life. They already have incorporated GLP-1 management into their comprehensive practices over the past several years. These patients are actively looking for an alternative to lifelong GLP-1 meds, but they don't want something viewed as anatomy altering.

Second, interventionalists are not clinically but also economically motivated with expected revenue per physician that is high and recurring. Third, and this is the commercial build consequence. This is a finite and nameable target list of physicians to get to know and to train. They all know one another infinitely, and they reference one another in their buying decisions. Revita's medical education opportunities are already growing simply through word of mouth among these interventionalists. These features support a highly efficient field force of tens of people, not hundreds. We are excited by what we're hearing about anticipated volumes per center according to these physicians. 100 to 200 initial target centers, we estimate more than 2,000 GLP-1 patients per center per year already sitting in these practices.

We believe roughly 50% of patients should be keenly interested in an off-ramp and 250 to 500 Revita procedures per center per year as they ramp their service offering. Note that physicians tell us they have ample time and procedure suite or OR time to perform these procedures as well. Our own modeling suggests that each center has current capacity for over 1,000 Revita procedures a year. So we are still well within the institution's capacity constraints. So if a center has 2,000 GLP-1 patients a year and 250 to 500 of them convert to a procedure, that's a conversion rate in the low double digits of a panel of patients that the center already owns. We believe that, that's a reasonable and conservative assumption that we're modeling, and it's the reason a small number of centers can support a meaningful business on its way to profitability.

In the REMAIN-1 trial, the interventionalist training requirement was a half-day didactic session plus approximately 4 cases with a Fractyl clinical specialist to reach physician and staff proficiency. Protocol-defined technical success is complete ablation of the entire duodenum, more than 14 centimeters covering the post-papillary duodenum. That is a measurable endpoint, which our console measures and records, which means proficiency and standardization are something that we can verify objectively. And we have the infrastructure for training already built. Site training forecasts, equipment, procedure supply list, room layout and procedure workflow overview, this is not something we will develop after authorization. It exists and has been validated through our pivotal program across our trial sites and through independent testing with physicians who are new to the procedure.

This validated training program is one component of our de novo authorization application, and it's ready to go now. We walked through the opening centers selecting patients and performing procedures, now on to securing payment, which is where I focus much of my time today. Coding, coverage and payment are the 3 different aspects of reimbursement and market access with 3 different decision-makers and 3 different clocks. So let's look at each one. Coding. Coverage -- coding, we filed a CPT Category III application in June. We anticipate the code going into effect in 2027, and that is ahead of our potential marketing authorization. Coverage. On the Medicare side, we intend to leverage breakthrough device designation and CMS clearly stated desire to accelerate coverage for breakthrough devices through -- formerly through the TCET and now the new rapid pathways to aim for early national coverage aligned in timing with FDA authorization. We believe our argument here is strong given that CMS existing coverage for GLP-1s and existing national coverage for bariatric surgery.

On the commercial side, medical policy will be informed by our value dossier and our health economics work. We plan third-party prior authorization and appeal support to our centers and facility to facilitate early coverage with commercial payers. And lastly, payment. On the facility side, potential transitional pass-through or TPT to make hospitals whole on day 1. On the physician side, professional payment will be established through CPT valuation over time. Just remember, CPT, ambulatory payment classifications and pass-through outcomes are subject to the American Medical Association and CMS review cycles and are not assured. But all 3 tracks are moving now and the sequencing underway on each of these 3 is something I have deep expertise with from my prior roles.

Here's why I'm not as worried about the fundamental question of whether payers will pay for an obesity procedure. They already do. UnitedHealth, Elevance, Aetna, Cigna, Blue Cross Blue Shield of Illinois and Texas or HCSC, that's roughly 120 million commercial lives among them. Every one of them covers bariatric surgery today. And every one of them covers GLP-1s for obesity with either a prior authorization or an employer opt-in. And CMS with roughly 68 million beneficiaries, if you include Medicare Advantage and regular original Medicare, covers bariatric surgery under a national coverage determination and is now covering GLP-1s for obesity through the Bridge program, which went into effect on July 1. That's nearly 200 million lives that sit with these 6 payers already reimbursing bariatric surgery.

We expect the precedents to provide the road map for coverage decisions for Revita over time. Those are the tailwinds. We are not asking a payer to accept a new category of spend. We're asking them to accept a new lower-cost one-time entrant into a category they already fund on both the drug side and the procedure side. We've been engaged with CMS all through our journey and are continuing to engage actively with private payers as the coverage landscape evolves and as we approach the market. To that end, we are planning a registry to build the kind of real-world evidence that payers need to adopt and pay for new technologies. But we already have around 50 patients with 1 year of follow-up from REVEAL and the REMAIN-1 midpoint cohort, and that number will be around 250 patients once the pivotal study reads out. The FDA has granted a protocol amendment to allow us to gather longer-term data as well, and we plan to roll all of this into a prospective registry to develop more real-world evidence over time.

I would like to spend a moment specifically on Medicare because there is something has changed this last year that is a significant tailwind for our opportunity, and I don't know that it's well understood yet. The 2 key features are the GLP-1 Bridge program and the transitional pass-through or TPT payment pathway. The Medicare GLP-1 Bridge program began on July 1, and we estimate 4 million Medicare beneficiaries will access GLP-1s through it over the next 12 months. CMS has publicly said several million, but adoption has been quick even in the last few months. The Bridge program is set to expire December 31, 2027. But even the Congressional Budget Office estimates 65% will discontinue even if the program does not expire. So 2 million to 3 million of these beneficiaries are expected to discontinue within a year. Of those, we estimate 600,000 to 970,000 will achieve a deep response before stopping, which leaves an estimated 510,000 to 830,000 CMS beneficiaries eligible for Revita and for transitional pass-through on the basis of the CMS GLP-1 and bariatric surgery coverage for obesity with related comorbid conditions.

Said another way, a federal program is in the process right now of creating and then time limiting the exact population that Revita is designed to serve. This is an unusual alignment and why our coverage strategy is starting with CMS. Commercial payers will ask us for cost effectiveness, and we've begun our modeling with approximately 50 patients at 1 year that we already have against the interventions that already exist in the market and that they already pay for. The green band on the right is the payers' willingness to pay range, which is $100,000 to $150,000 per quality adjusted life year or QALY. Anything to the left is generally considered to be highly cost effective. Bariatric surgery sits at about $21,000 per QALY over lifetime. WATCHMAN's left atrial appendage closure device at about $28,000, TAVR at $50,000 and MitraClip at $56,000. Percutaneous coronary interventions for stable angina is at $171,000 cost per QALY on the far right, which is in the poor value zone. And GLP-1s for obesity at net pricing are at about $135,000 cost per QALY right at the edge of that willingness to pay band.

Revita modeled at between $10,000 to $30,000 ASP sits to the left of every device intervention on this page. Revita can be highly cost effective even at the higher end of our modeling. Two caveats. The Revita value is our internal modeling. It's not peer reviewed, and it is contingent on the durability that we will see in REMAIN-1. We used a Monte Carlo simulation of over 10,000 scenarios that assumed some attrition in Revita's effectiveness over time and assumed declining GLP-1 prices from their current net prices as well. So I don't believe that we're being overly ambitious, but we will need more long-term data and to keep a close eye on the market to be able to model more precisely. And these are cross-study comparisons, so populations comparators and time horizons do differ.

Let me close by reminding you that there are 4 things that we need to do to be successful commercially, mapped to the 4 main roles that we plan to have in our commercial organization. To open high-quality centers, we intend to hire business development managers focused on new site selection and activation, to select appropriate patients, account managers focused on site execution, patient funnel and procedural growth, to perform great procedures where clinical specialists focus on clinical excellence and outcomes and to secure payment, a team of health economics and market access people focused on payer engagement, prior authorization and billing support.

Before I joined the company, I was pleased to see that Harith and the team had already built an organization with ample experience in each of these first 3 dimensions through the execution of our clinical study, which required all of these skills to be put to use. We ran the REMAIN-1 study mostly in-house with our own personnel, precisely to develop the capabilities necessary to help us prepare for commercialization. Many companies rely on CROs for these functions, but these are skills inherent within our team today. As for the fourth of these capabilities, the health economics and market access or HEMA team is where my experience comes in. That is tens of people in the commercial organization over the next 2 to 3 years of ramp, not hundreds. We believe that it is possible because the target list is finite and nameable because the physicians already own the patients, because medical education is spread via word of mouth and because volume comes from depth in a small number of centers rather than breadth across thousands. That structure is what makes the economics work.

Lara is going to take you through these economics now. So Lara, over to you.

Thank you, Mike. You've heard how this works, the center model, the patient, the procedure, the access pathway. My job for the next few minutes is to tell you what it's worth, what it costs and when it turns profitable. Before I go to the model, I want to show you that this shape of launch has worked before. Inari, where Mike comes from, in venous thromboembolism followed a center of excellence model, reaching more than 50 of about 200 targeted centers in year 1, a 30% compound revenue growth rate in the launch years and an exit to Stryker at $4.9 billion, about 8x sales.

Shockwave in high-volume PCI centers added 1 to 1.5 new accounts per territory per month, reaching the majority of its target in about 2 years with 57 compound revenue growth rate and an exit to J&J at $13.1 billion, about 14x sales. And WATCHMAN, which Boston Scientific bought preapproval, scaled past 700 programs and $1 billion a year under the commercial leadership of Fractyl Health's Board member, Sam Conaway. What drove value for shareholders in all 3 cases is the same 3 things: a finite list of high-volume centers, deep utilization per site and strong growth. The indications were different, but the model was the same. That is the model we are describing to you today.

On price, we are not disclosing a number today. What I can show you is the corridor the market has already established because payers are already paying at both ends. On the left, endoscopic sleeve gastroplasty. It has a Category I CPT code since January 1, 2026, and Medicare pays roughly $11,600 in the hospital setting. On the right, bariatric surgery. Commercial and uninsured pricing runs $20,000 to $33,000. Revita sits in the middle. It is outpatient and under an hour. There is no resection and no anatomic change. So it is repeatable and leaves no permanent implant. And it targets the duodenum, which is a distinct mechanism from restriction. So the bracket is roughly $11,000 to $33,000 set by procedures payers already reimburse. Unit economics have to work for providers and for Fractyl, and we believe they will.

From the hospitals' view, endoscopy and bariatrics are already major drivers of hospital contribution margin. Transitional pass-through enables a positive contribution margin from day 1 by passing the disposable cost through to CMS. And there is no new capital footprint to justify because the rooms, infrastructure, physicians and support already exist. One thing to highlight, because pass-through reimburses the device separately, the hospital's economics do not depend on our price. Our pricing is not a barrier to adoption. From Fractyl's point of view, potentially high gross margin on the disposable, capital light with no high cost, long lead time sales cycle per site and commercial cost that scales with sites rather than linearly with volumes. The potential result is recurring high-margin procedure revenue concentrated in high throughput centers, which brings me to the ramp.

We expect potential launch in early 2028. Centers with cumulative on the left, 30 to 50 centers by the end of 2028 and 60 to 90 by the second half of 2029. Procedures on the right expected to grow to 5,000 to 10,000 annually in 2029. Two things worth noting about the shape. First, these are the same high-volume centers you heard about earlier. Second, volume grows faster than the network does in year 2. We expect to increase procedures per center as centers get up and running. The 2028 center cohort matures through 2029, providing meaningful growth. These are management estimates. They are contingent on pivotal results and on FDA marketing authorization, neither of which is assured and they are not guidance.

And now putting that all together with every input on one page so you can run it yourself. Price per procedure, $11,000 to $13,000, which is the benchmark range we just walked through -- $33,000, which is the benchmark range we just walked through, gross margin of approximately 80% for the single-use catheter in line with single-use peers. Note that we held the margin flat across scenarios to be conservative. Higher ASP may lead to quicker cash breakeven than shown. Now solved for procedures at 80% gross margin and against a $22 million quarterly breakeven cash burn. At a $10,000 ASP, we need about 2,750 procedures a quarter to break even. At $20,000 ASP, 1,375 procedures a quarter, not tens of thousands and across a range of prices, potential cash breakeven is possible in 2029. Every one of those dates assumes de novo approval in the second half of 2027 and CMS coverage and transitional pass-through in early 2028. They are contingent on de novo authorization, on coverage, on financing, and they are not guidance. And these are estimates only, real-world results could vary.

Let me put the whole sequence on one page. Today is our commercial Strategy Day. Early Q4 2026, we expect pivotal 6-month top line from the over 300-patient randomized trial. Late Q4 2026, potential FDA de novo submission, late 2027, potential FDA approval and launch preparation, early 2028, U.S. commercial launch with transitional pass-through in place and cash profitability expected in 2029, potentially 5 to 8 quarters from launch to cash profitability on a potential high gross margin disposable into a finite set of centers that already have the patients, the physicians, the rooms and payer precedent for obesity procedures. These time lines are management estimates and forward-looking. Revita is investigational and commercialization is subject to REMAIN-1 results and FDA marketing authorization, neither of which is assured. Harith opened the day with this slide. What I'd say is that these were 6 claims this morning, and you've seen what sits behind each of them, the unmet need, the durability data, the regulatory path, the centers, the payment work and the economics.

With that, I'll hand back to Brian for questions.

Fantastic. Thank you. That concludes our prepared remarks. Operator, we're ready for questions.

[Operator Instructions] So our first question comes from Michael DiFiore at Evercore.

Great presentation. Two questions from me. First on pricing. I know you can't disclose the price today, but the price of $10,000 to $30,000 per procedure is kind of a wide range. You mentioned in your presentation that you need long-term durability data. Is that the main deciding factor in terms of where on that range the price may lie? And then I have a follow-up.

I would say this. If the 50 patients that we've seen from REVEAL and REMAIN are in the indication, we feel very comfortable across that range in pricing. We will be thinking through what this looks like once we have the full cohort from REMAIN-1 pivotal, which we've just announced will be a Q1 result. That will put into our health economic modeling and then provide granular detail. I think the fact that there's a wide range of possibility here shows that we can straddle from truly cost effective for the market to -- sorry, cost savings for the system through to highly cost effective across that entire range. And so some of these choices are going to be dependent upon our data and some will be dependent on conversations that we have with insurers.

I see. Very helpful. And my follow-up question is that you previously suggested that retreatment at 18 to 24 months or later would likely be acceptable. But you also said that it may not be necessary for some patients or many patients. I guess my question is what percent of patients do you currently model needing a second procedure at 2, 3 or 5 years?

Go ahead.

Great question, Mike. Look, right now, the numbers that you've seen in the scenarios, I think it's Page 40 for breakeven, none of those depend on retreatment. If you think about the 5,000 to 10,000 annual procedures in 2029, that's about 0.1 percentage point of the TAM of the $4 billion.

Retreatment would be upside on that.

Our next question comes from Angela Qian at Canaccord.

Maybe one for Dr. Ayoola. Understanding the threshold for approval here is maintaining that 5% total body weight loss. But from your perspective, I guess, what percent weight loss maintenance is clinically significant? And I guess, like what would be meaningful to patients? And then I have a follow-up.

Thanks for that question. I think meaningful to patients, right now, within 1 year, people gained back 66% of what they've lost. That's what the data shows. In general, we want to say that if you maintain 50%, that clinically is significant. But I think patients would want to see even if you have that, if they're not getting back 66%, if they're getting back 30%, I think they will tolerate that. I think the data Harith showed earlier, I think patients would really gravitate towards even just that.

Okay. That's very helpful. And you also mentioned that you have some patients interested already. I guess if you could just provide a bit more color like how many patients are interested, what percentage of your total practice does that number represent?

So we just recently had these conversations, and this was something that I learned about earlier this year. So I've been informally asking patients. So I don't have hard data. I haven't kind of put this down. But virtually every patient I brought this up to has been excited about it. I haven't had anyone kind of say, no, I wouldn't be interested in that. They're all intrigued by it. So of the patients that I have on GLP-1 that I've just kind of gently talk to about is, hey, if we had something like this, what would you think? Their eyes typically light up and they're very interested, especially when you describe that it's a nonsurgical procedure and we're not changing any of their anatomy and we're not burning any bridges.

I think right now, the majority of the patients I see are getting GLP meds. I would say I'm probably seeing about 20% of my patients opt for surgery and 70% plus opt for GLP-1. It used to be that if I had 10 patients a day, it would be 70% surgery, 20%, 30% medication. And I leave that extra percentage because somebody would just want me to do lifestyle stuff with them. But that has completely flipped around. Now the majority of patients want GLP-1 and virtually all of them are interested in something to lock in the weight that they've lost.

The last thing I'll say is that a lot of patients also are okay with coming back every few years, every 5, 6 years to get -- kind of get a re-up. What you find is that patients, for example, when we first started doing GLP meds, I think was Saxenda, it was a once-a-day injection, and nobody wanted it and for weight loss. And then when it turned into a once-a-week injection, now people like it. And so when people know that they can have these procedures done at a longer interval, it makes it more and more appealing.

Our next question comes from Chase Knickerbocker at Craig-Hallum.

One for the company first and then a follow-up. Just trying to get a sense for how you see your early positioning with commercial payers versus Medicare where you have potential payment clarity through pass-through. Maybe just over those first 5 to 8 quarters of launch where you see getting to breakeven, what do you expect your payer mix to be in that kind of breakeven time frame from a perspective of kind of commercial versus fee-for-service and Medicare Advantage?

Thanks, Chase. I'll take that one. This is Mike. Well, as we said, we're focused on CMS because of all of the mechanisms and the tailwinds that we have, the GLP-1 Bridge program, transitional pass-through, there's going to be a growing number of patients looking for an off-ramp 12 months from now. But with commercial payers, we plan to engage with them early. We've already started some of that work. We don't have a sense for payer mix quite yet because that's shifting and will shift pretty dramatically over the next year. But we are planning to focus first on CMS, but while in parallel, engaging with private payers. We plan to hire a prior auth and appeals third-party company to do all of those kind of hand-to-hand combat with new procedures. We'll have a Category III code in place. And so it is still part of our strategy. But we know that, that's going to take a little bit longer as we build our CMS business.

I'll just add with a couple of points. First is our assumption built into our modeling that most of these patients are going to come from CMS in our initial launch and anything that comes from private payers will be upside. Secondly, payers are not a monolith. You've seen the 5 major players and their coverage policies. Our observation is that those who are self-insured employers or integrated delivery networks are tending to cover for GLP-1s and see higher costs and conversations that we've had with them informally suggest they would be the earliest to adopt on the commercial side, and then we would grow from there over time with the registry. So assume very small private contribution early on, but growing over time.

Makes a lot of sense. Maybe Dr. Ayoola, can you give us a perspective of how you view the learning curve for the Revita procedure for bariatric surgeons, I think particularly those without kind of large endoscopy practices today? Can you just give us your thoughts there?

That's a great question because bariatric surgeons aren't a monolith. And so you have so much variation. You have people that only do procedures. You have people like myself that are comprehensive. And when I say a practice like mine is comprehensive, I do my own endoscopy and things like that. So for me, the learning curve and for folks like me, I'm not the only one, obviously, for folks like me, the learning curve, I don't expect to be too steep, because we are familiar with endoscopy and are comfortable doing things like deploying stents under fluoro and putting EndoVAC in and things like that.

It's hard to know how many of folks -- bariatric surgeons like myself versus others. But certainly, people, you can have an idea. I would -- if I were to guess, I'd say 30-ish percent, 30%, 40%. Those are people that attend meetings and attend endoscopy courses and things of that sort. So if you have that experience already, then you'd be fine. The other thing I'll point out is that a lot of times, bariatric surgeons are very motivated to learn new stuff because, for example, when the Lap-Band was the rage, everybody went and figured it out and learned it and things like that. So I think if you see Revita being adopted, and you're going to find all these surgeons very motivated to learn that. So it's a shorter course for folks like me that have been doing these procedures. I would expect to be up and running within 5 to 10 cases very easily. And then you see folks that aren't as experienced needing 20 to 25 cases to get reasonably technically efficient.

Our next question comes from Rohit Bhasin at Morgan Stanley.

Can you just talk about your thoughts on the durability of the procedure? What do you think is clinically meaningful?

Dr. Ayoola, that may be a question for you, but I'll go ahead and take it. Our market research suggests that something that lasts more than a year begins to become interesting to patients, less than a year would not be interesting. But thankfully, the data that we have suggests at least 1 year of durability so far. I think somewhere between 18 and 24 months might be a sweet spot from a modeling standpoint, to be fair. So beyond that is going to be attractive to patients, maybe able to enable higher pricing as we've talked about. But there are so many patients who have told us -- the ratio of patients who told us that they will repeat the procedure at 18 to 24 months suggests to us that even if that were the duration, then we would have excellent uptake. However, we have seen 24 months of durability in our type 2 diabetes work, and we will see 24 months of durability from weight maintenance by next year. And so we're quite optimistic about 2-year durability from where we sit today.

And then I guess for Dr. Ayoola, in your practice, what are patients' perspectives on -- on a maintenance strategy where they're staying on a GLP-1 on a lower dose or a lower frequency versus a procedure such as Revita?

So lower frequency is certainly what most patients opt for, and they can tolerate that low frequency for a while. I think that repeatedly, you just find patients stop following up because in the back of our minds, for whatever reason, people just really feel like once the number on the scale hits their goal, they shouldn't have to do anything anymore. And so the concept of obesity being a chronic disease still just hasn't taken. People get it with diabetes or high blood pressure.

But with obesity, people really just feel like if they just get down to that number, they'll be able to maintain it without having to do anything or anything additional. And that's what I like about Revita is that, okay, fine, if you want something that kind of gives you a break from having to worry about this stuff so much, then this is what it is. And that's where mentally people just are. So even when you're talking about micro dosing or extending the frequency and things like that, they like it, they prefer it because the less they have to worry about it, the better. But what better than to do a short endoscopic procedure that then gives you a year, 2-year, 3-year holiday from having to worry about this stuff. And that's why I think it's so attractive.

Our next question comes from Jason Gerberry at Bank of America.

Maybe for Dr. Ayoola, you mentioned, I think, for your patients on GLP-1, I think you indicated like about 100% are looking for some sort of off-ramp. I was wondering if you could drill down a little bit more into that, like what proportion do you think are amenable to something like Revita? Do you think that an off-ramp may entail Revita and perhaps a lower dose of an anti-obesity medication? Or do you think that it's kind of cold turkey on the medicine? Just kind of curious how you're thinking about that dynamic.

And then just trying to get your sense of like patients' appetite once they do discontinue GLP-1 to reengage either with like lifestyle modification, a pharmacotherapy alternative? Just trying to think in the context of when other alternative mechanisms like Amylin are available that may have a gentler side effect and how you see the interplay of that versus like a Revita like option?

Thank you. So you touched on a few things. And one of the slides I really like when I saw Harith's presentation was the one looking at the different steps. So this is step 1, prove it, and it's focused on just maintenance of weight loss after GLP-1. But what you're talking about is more the step 2s and the step 3s. What does it look like as an adjunct to oral injectables, procedures, other things? And what you're expecting to see is additional weight loss. And then the last thing is frontline where you just use it straight up without anything else. It's just your primary treatment. And I think these are all very appropriate things to think about.

And I think things will move very quickly, honestly, in that direction. The reason I say that is that my approach and the approach of most people that do this comprehensively is nothing is bad. Everything is just another tool, another option. And what you'll find is that patients are very different. Some people will come in and they're like, I don't even want to take a GLP, I just don't want surgery, but give me something. And Revita and the front line can do that. There are other people that say they want to lose x amount of weight, and you know the GLP is not likely to do that. Those are the people where it's Revita plus GLP-1, and they're happy to stay on both, as I said, decreasing the frequency of the GLP as they go further along for cost reasons and just lifestyle and things of that sort.

So all of these things, I think, are very relevant. And you're going to have a mismatch of patient population that wants one thing versus the other. So it's very difficult to say ahead of time what those things will break down as, but you know for sure you're going to have that. There are people that come in and they are very, very serious about the lifestyle component. And there are people that really just are honest with themselves and they're like, yes, I'm not going to do all these other things that I know I should do. I just need something to help me with that. If I missed any specific question you had, please repeat it, and I'll address that specifically, but I'm just giving you the broad idea of the -- just thought I get from talking to patients' day in and day out.

Our next question comes from Jeffrey Cohen at Ladenburg.

Two in particular, I guess, maybe firstly for Mike, if you could talk a little bit about the fixed equipment and generators as far as placing leasing or selling specific facilities and how you think that plays out?

Yes. Thanks for the question, Jeff. Yes, we're thinking about pricing the Revita as a system. So doing a placement agreement for the console, which we've done in previous companies, and that's a workable solution and having the cost rely on the single-use catheter. So right now, that's -- our strategy is to start doing the contracting after we get FDA approval or clearance and start having those conversations. But early on and based on my previous experience, that's a model that works pretty well and takes advantages of all the mechanisms that we talked about.

Got it. And then as a follow-up, I guess a question for Dr. Ayoola as well as Mike yourself and Harith maybe. Could you talk about the specialties out there? I know we heard about bariatric surgery and maybe talk about GIs and perhaps speculate as far as which segment will be driving the procedure more in the commercial setting out there.

So maybe Dr. Ayoola, you could start just by talking about sort of how the field -- your field has evolved over the past several years. And then I can talk about GIs and the role they'll play.

Thank you. So obviously, I'm a bariatric surgeon and will come off incredibly biased guilty as charged. But I do think that bariatric surgeons like myself that are comprehensive are a natural fit for this. I wouldn't say every bariatric surgeon because there are those that simply want to operate. They don't prescribe meds, they don't do anything else. They just want to operate and do procedures. But for those that take a comprehensive approach, I think that's a perfect fit. That's someone that can walk the patient through every conversation, every tool and can perform all of these things and prescribe the medications and so on. I think that if it's -- if you have someone that is an interventional endoscopist, again, not all GIs will be able to do this or want to do this.

But if you have interventional endoscopists that could work as well, the difference, though, is that they will be focused more on the procedure than they are on the overall follow-up and things like that. So that's the concern there. I would wager interventional radiologists could probably do this. But again, it's -- the question is who has the best overall approach to it. And I think that would be bariatric surgeons that run a comprehensive program. And you've seen that folks doing Lap-Band in the past, sleep gastrectomy in the past, those are the operations on the lower invasiveness level. And so something like this is relatively low on the invasion -- how invasive it is. And so that's something that will be appealing, I think, to most bariatric surgeons.

What we observe about bariatric surgeons is that they have literally everything in place ready to go so long as they want to incorporate Revita endoscopically into their practice and are doing endoscopies themselves. Dr. Ayoola said about 30% of the 2,000 to 3,000 surgeons in the United States fit that bill, we would be -- we would agree roughly with those numbers. And when we talk about 100 to 200 centers over the first couple of years, I would tell you that those are already surgeons like Dr. Ayoola, who have all of the capabilities already in place and the endoscopy skills already, they just need to be trained on Revita specifically. So we feel very good about that.

One thing about bariatric surgeons also is that those who have migrated to this comprehensive view are prescribing diet and lifestyle and prescribing medications. Many of them are ABOM certified as well as surgeons and so are very -- are staying up to date on Amylin and other drugs that come, but then also can offer interventions as part of a comprehensive set of offering for patients where we think Revita fits. In GI, I would tell you that the endoscopic skills are let's say, like already right there. There is a smaller set of gastroenterologists who have already built comprehensive practices like Dr. Ayoola has in bariatric surgery around endoscopic offerings. That's why we focus on a couple of hundred to 300 in our numbers rather than the 15,000 endoscopists in the United States.

However, you slice it, the targeted efficient commercial model with high-volume centers could really enable substantial growth for the early launch in the foreseeable future thereafter. We are very excited about how this field could grow. We see convergent evolution between GIs and surgeons towards metabolic interventions and that convergent evolution is why we sort of view them as one potential customer. Every one of these metabolic interventionalists has all of the same features, which is a desire to do this endoscopic procedure, all of the wraparound services necessary and the patients in their panel already who are actively seeking an alternative to just chronic medications. That's what we think would be the lowest hanging fruit for us.

Our final question comes from Joe Pantginis at H.C. Wainwright.

So one question for Dr. Ayoola and one for the company. So Dr. Ayoola, you really provided a lot of details answering my questions, and I believe a lot of others. So I wanted to take one of your comments and flip it on its head with regard to playing devil's advocate. And that's patients don't necessarily want to go under surgery and might be more amenable to endoscopy. Do you have or what level do you see of patients that don't even want to have anything interventional like that?

100%. You have 40% of the population dealing with obesity. We surgically treat 0.3%. Even with GLP, you're still only plateauing the rate of growth. You're not even pushing that the other way. I think this is actually opportunity rather than every problem is an opportunity. So one of the questions I was asked when we were discussing this was, do you think you're going to run out of patients? And I almost fell out of my chair laughing because that's -- the problem is giving people options and catching more and more people to treat with options because the problem is so prevalent. And as much as we're fighting, we haven't pushed back enough. So I agree with you that there are patients that just don't want anything. But they also don't want to continue suffering obesity. And even if they don't care, the health care costs are astronomical. The downstream effects of obesity, it can't be ignored. So at some point, someone needs to crack the code. And I just think that having this product is part of that cracking the code.

No, absolutely. That's very helpful. And then for the company, this is obviously very forward-looking, but I'm going to ask it anyway, and hopefully, you can take a first shot. What kind of label do you anticipate, especially when you're looking at the current data sets of having an optimized population and seeing better success rates and greater than 14 centimeters and greater run-in weight loss?

Well, I -- anticipating a label is sort of like predicting what the FDA is going to do. So I'd rather not answer the question that way. But I think everyone would want to be able to have us identify patients and a procedure that are most likely to deliver benefit for patients and the highest quality benefit that you can deliver. What we saw from our pilot studies is that more ablation length corresponds to greater efficacy. We are convinced that physicians can be trained on that greater ablation length once that is established. And the appropriate place for that could be in like an instructions for use or part of the data set, which is what we built into our trial. And I think that if more ablation is better, we believe that should be very clearly stated as part of physician training and the certification processes.

And then secondly, with respect to more run-in weight loss, again, what we observed in the midpoint cohort for those who are listening is that the sham arm regains weight far more rapidly if you lose -- if there's more weight loss on the GLP-1 to begin with. That's consistent with what you see in the trials from the pharmaceutical companies. It's consistent with what you observe in real world. So translated, the patients who are at greatest risk of weight and metabolic rebound are those with the greatest responses to these agents. And I believe that physicians and patients should be appropriately informed of that, assuming the pivotal trial continues to manifest what we observed in the pilot in order to be able to make an informed decision.

And as Dr. Ayoola said, there are so many people who have lost substantial weight plateau looking for an off-ramp. There are so many new drugs that are coming that are going to be even more potent than those that already exist. So for me, it really boils down to optimizing the benefit risk calculus. And the risk side of the equation, we've not really talked about, luckily because it looks so promising, we have not observed an adverse effect level even with longer lengths of ablation, which suggests to us that there may be more room to probe on ablation length even than what we are showing here, but also suggests to us that there is really no downside that we have observed with longer lengths of ablation. I hope that answers your question without talking about what the label will actually say, but more about what we think the market needs in order for people to really embrace this.

Thank you to our speakers, analysts and audience for joining us today. This concludes our event. You may now disconnect.

Thank you. and welcome to Factos Health's second quarter 2026 financial results and business update call. As a reminder, this conference call is being recorded. This time, all participants are on listen-only mode. There will be a Q&A session following management prepared remarks. I will now turn the call over to Brian Luque, Head of Investment Relations and Corporate Development at Fractal. Brian, 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.fractal.com under the investors tab. Joining us on the call today are Dr. Harith Rajagopalan, Chief Executive Officer, and Laura Smith-Weber, Chief Financial Officer. During this call, we make forward-looking statements which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. list of risk factors in our SEC filings, including the quarterly report on Form 10-Q filed today, which I encourage you to review. Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements, even if subsequent.

caused the company's views to change. It is now my pleasure to pass the call over to Harit. Thank you, Brian. Good afternoon, everyone. Nearly 30 million Americans are now on GLP-1 therapy. Approximately 1 million are discontinuing each month. What happens after discontinuation is now well characterized. On average, patients regain roughly 60% of their prior weight loss within 12 months of stopping therapy, and cardiometabolic benefits begin to erode even earlier.

For many patients, the choice is either to resume chronic pharmacotherapy or accept substantial weight loss. Regain. We believe Revita has the potential to offer a third option, durable, drug-free weight maintenance following a one-time endoscopic procedure. A year ago, that was our thesis. Now, we have the first randomized sham-controlled evidence supporting that thesis one year after GLP-1 discontinuation and the most direct read-through to the Remain-1 pivotal cohort expected in early Q4. On our last three calls, I laid out four pillars that give us conviction in RUVIDA. First, the clinical signal is real. Second, our pivotal study is built to win.

Third, there is a clear path to commercial value. And fourth, we are funded through definitive data later this year. Let me take each of them in turn, but I'll spend most of my time on the commercial opportunity today. The clinical signal is real. On July 15th, we reported one-year randomized data from the Remain One midpoint cohort. The study asked a simple question. One year after stopping a GLP-1 therapy, how much of the weight loss do patients keep? Revita patients maintained more than 80% of their prior GLP-1 induced weight loss at one year. compared with 46% in the sham arm. The treatment effect held from month six through month 12 under maintained blinding in a cohort where not one patient reinitiated GLP-1 therapy.

And an additional piece of confirmatory evidence, the Open Label Reveal One cohort showed a consistent signal in June, with participants maintaining approximately 78% of their prior weight loss through one year after a single procedure. So we now have two different patient populations showing one year of durable weight maintenance and compelling effect size after Revita. This directly addresses the most important question about our six month data presented earlier in the year. Were we producing durable separation or simply delaying weight regain? Dr. Adarsh Thakur of UCLA a principal investigator on Remain One, named that concern on our July call and told us that the curves are now showing hints of a plateau at the one year mark. Two details sit behind those numbers. The strongest results came in patients who achieved complete ablations and higher run in weight loss, the two variables the pivotal study is enriched for.

And the sham arm behaved as published literature would expect and predict, providing strong external validity to the study outcomes. I'd like to spend a minute on safety and tolerability because I believe it is one of the largest single drivers of Revita's eventual adoption. one full year, there were zero device or procedure related serious adverse events. In fact, in the midpoint cohort, there were only four mild treatment emergent adverse events in the entire study, all resolved within two days. For a procedural therapy in obesity, this is an unusually clean profile, and it is the reason we believe. adoption by physicians and patients may be substantial. Compare this profile with the only alternative these patients have today. GLP-1 medicines are associated with high rates of GI adverse events. The more potent the agent, the more adverse events.

Primary care providers are already referring patients gastroenterologists to help manage these GI side effects. That potential to address a real concern for patients is why a gastroenterologist is prepared to offer this procedure to the patient who walks into clinic or the endoscopy suite, and why a patient who cannot or will not stay on a GLP-1 is willing to try it. Pillar two, the pivotal is built to win. The Remain One Pivotal cohort is a larger, well-powered version of the midpoint cohort, just run larger. Same patient profile, same protocol, same investigators, same blinded dietician oversight. It is the largest sham-controlled GI endoscopy pivotal trial for a novel therapeutic device ever conducted. We completed randomization in February with more than 300 participants across more than 30 sites with more than 20 operators.

Importantly, the pivotal is enriched for the two variables that were associated with greater treatment effect. The threshold for a complete ablation is 14 centimeters. In the pivotal, the median ablation length is 16 centimeters and the mean is closer to 17. The threshold for higher run-in weight loss is approximately 17.5 percent, in the pivotal, mean run in weight loss is 18.3%. We have two co-primary endpoints and based on the data we've generated to date, we estimate both are well powered above 95%. The first is percent total body weight regained between Ravida and Sham at six months. The required margin is a separation of roughly 2.5% and the midpoint MITT result using the pre-specified statistical analysis plan submitted to the FDA clears that comfortably.

The second is the responder rate. The FDA-mandated pre-specified performance goal is a single-arm result of at least 50% of patients maintaining at least 5% total body weight loss at 12 months. In the midpoint cohort, that figure was 73% in the MIT. TT population and above 90% in the complete ablation population. Every operational metric that we believe is important to the pivotal success continues to track favorably. Retention remains well above 90%. Medication resumption remains below our model assumptions. The blinded adverse event profile remains consistent with what we have seen across prior studies, reinforced by our DSMB interactions.

We remain on track to report top-line 6-month primary endpoint data in early Q4 2026 and expect to report top-line 12-month data from the Remain One Pivotal cohort in Q1 2027. On the regulatory front, we have favorable FDA feedback in hand that ReVita's safety profile is consistent with a moderate risk rather than a high-risk device classification. We remain on track for a potential de novo submission in late Q4 2026, following the six-month pivotal data readout. As with all applications, final pathway determination will follow FDA's review of the complete safety data set, which we intend to include in the submission. Pillar 3, the path to commercial value. One overarching point, the trends that are shaping the GLP-1 market strengthen Revita's commercial opportunity. They expand the addressable market, they increase the potential treatment effect, or they improve the economics, and often all three at once.

We'll take you through the detail at our Investor Day in September. First, the market opportunity is well understood by all key stakeholders. FDA has granted Ravida Breakthrough Device designation for post-GLP-1 weight maintenance. CMS has begun covering GLP-1s for weight loss while openly raising concerns about frailty and about the affordability of a therapy taken for life and physicians are already fielding the question. Patients are asking obesity medicine specialists how long they need to stay on the medicine at the moment they are provided the first prescription and gastroenterologists are now taking referrals for GLP-1 side effects with no off ramp to offer as of yet. And here is the part I think is most underappreciated. It does not need a new site of care either.

These patients are already in GI clinics and GI labs every day, and the endoscopy suites, physician expertise, and clinical workflows are already in place. Second, we view the oral era as a demand engine. One question we often hear is whether more convenient GLP-1 therapies reduce the need for Ruvida. The evidence to date suggests the opposite. Most oral GLP-1 initiations are new prescriptions rather than switches, and there is no evidence that oral formulations the barrier to stopping. Every initiation, oral or injectable, is a potential future discontinuation and need for an off-ramp. Third, the next generation of these medicines may increase rather than diminish Ravida's treatment effect.

As next generation therapies deliver even more weight loss, the need for a durable off-ramp only grows. In the Remain program, the placebo-adjusted Ravida treatment effect in the midpoint cohort increased with greater run-in weight weight loss. The more weight a patient lost on drug, the greater the weight regain after discontinuation, and the larger the measured Revita benefit. Fourth, payers are converging on the need for a durable solution. A major development this year was the introduction of the Medicare GLP-1 Bridge demonstration, having gone live on July 1st in a population that has both the highest obesity prevalence and high discontinuation risk. CMS administrators expect single-digit million number of patients under Medicare to be on GLP-1s within the next year. The Bridge Program sunsets at the end of 2027, and the major payer objection is not that obesity treatment does not work, their concern is the affordability of treatment that continues indefinitely, together with poor adherence and high discontinuation in real-world practice.

That is exactly the challenge Revita is designed designed to address. Pillar four, we are funded through definitive data. Fourth and finally is our capital situation. Laura will take you through the quarter in detail, but let me state our posture plainly. We ended the quarter with $47.1 million in cash. Our runway extends into early 2027, beyond the pivotal data readout and through a potential de novo submission. Our ATM facility remains closed. We do not plan to raise capital before we have pivotal data in hand.

The marked reduction in cash outlay in the second quarter versus the first or versus next year versus last year reflects the completion of pivotal randomization, and sustained fiscal discipline across the organization. This is a deliberate choice grounded in conviction. We believe the pivotal data will be positive and we are choosing to operate inside our existing capital envelope through the most consequential two quarters in this company's history as a signal of management's alignment with shareholders. Turning briefly to Rejuva, our smart GLP-1 gene therapy platform targeting long-term metabolic remission from a single dose. In Q2, we received clinical trial authorization in the Netherlands to initiate the phase 1-2 first in human study of Rejuva 001. We have also now received Ethics Committee approval in Australia. We believe Rejuva-001 is the first AAV-based gene therapy candidate to enter clinical development for type 2 diabetes.

OO1 is a one-time beta-cell targeted gene therapy designed to enable nutrient responsive, physiologic GLP-1 expression within the pancreas delivered by a minimally invasive endoscopic ultrasound guided infusion. The design intent is to avoid the high circulating drug levels that drive the side effects associated with systemic GLP-1 therapy. The primary objective of the first in human study is to evaluate the safety and tolerability of OO1 together with the feasibility and safety of delivery to the pancreas using the Rejuva system. Secondary objectives include assessment of glycemic effect using continuous glucose monitoring and mixed meal tolerance testing, characterization of GLP-1 secretion, and evaluation of immune response. The study uses staggered sentinel dosing in which the first participant is monitored for a minimum of 14 days and their safety data reviewed before any additional participants in that cohort are dosed. We expect to dose the first patient subject to imminent site of activation and patient enrollment and to report preliminary data in the second half of this year. Importantly, Rejuva's clinical development is funded within our existing runway and does not compete with Revita for capital.

Before I hand to Lara, here is our near-term calendar. In early September, we will host an investor day to walk through the commercial opportunity, our market access strategy, and the health economics work our new Senior Vice President of Market Access and Commercial Strategy, Mike Zumdahl, and his team have been leading. In early Q4, we anticipate reporting top-line six-month randomized data from the Remain One pivotal cohort. In late Q4, we anticipate our potential FDA de novo marketing application submission. And in Q1 next year, we anticipate reporting top-line 12-month data from the Remain One pivotal cohort. Laura?.

Thank you, Harith. Research and development expenses were $13.8 million for the second quarter of 2026, compared with $21.2 million for the same period in 2025. The decrease of $7.3 million was primarily related to reduced spending on our ReVita and Rejuva programs. SG&A expenses were $5.3 million for the quarter, compared with $4.9 million for the same period in 2025. The increase of $0.4 million was primarily driven by higher stock compensation expense. We reported a net loss of $25.5 million for the second quarter of 2026, compared with a net loss of $27.9 million for the same period in 2025. The $2.4 million decrease was driven by a $7 million reduction in operating expenses, partially offset by a $5.1 million higher non-cash loss from the change in fair value of our warrant liabilities with smaller movements in debt fair value and interest income. Adjusted EBITDA was negative $16.3 million for the quarter, compared with negative $24 million in the second quarter of 2025, a $7.7 million improvement driven by reduced operating expenses excluding stock compensation.

As of June 30th, 2026, we had $47.1 million in cash and cash equipment. I want to draw your attention to one point on run rate. The first quarter carried certain one-time costs associated with completing Remain One's pivotal cohort randomization. The second quarter does not. Cash used in operations was approximately $16 million in Q2, which is a better reflection of our post-randomization run rate than Q1. Based on our current business plans, we believe our cash position will fund operations into early 2027, beyond the anticipated Remain One Pivotal Data readout in early Q4 2026, and through a potential de novo submission in late Q4. With that, I'll turn it back to Haris. Haris Karim, Thank you, Laura.

I'm going to close where I started with our four pillars. First, the clinical signal is real. We now have randomized sham-controlled one-year data showing 80% GLP-1-induced weight loss maintained versus 46% with sham. Second, the Pivotal is built to win. It's the same experiment, run larger, powered above 95% on both co-primary endpoints, and enriched on both of the variables we now know drive effect size. The last six-month visit happens this month, and we remain on track to report top-line data in early Q4. Third, the path to commercial value is clear and we are building on it now rather than waiting.

The market already exists, the patients are already seeing GI physicians, and payers are converging on the need for a durable alternative. And fourth, we are funded through definitive data. Our runway extends into early 27. There is no planned raise before pivotal data. I want to thank the patients in our pivotal study who have trusted us with their health and their persistence and the investigators and operators who have executed this trial with real skill. I want to thank our employees who's focused through an demanding stretch has been exceptional and I want to thank our shareholders whose conviction in the science makes all of it possible. Operator we are ready to take questions.

Thank you. At this time, we'll conduct the question and answer session. As a reminder to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Michael DeFiore of EverQuery. I saw your line is now open.

Hey guys, thanks so much for taking my questions. Two for me. One regarding profitability. I think in the past you said that you believe that FATL can be profitable with a targeted launch into the top 100 to 200 US centers. My question is what procedure volume per center is embedded in that profitability assumption and how quickly do you expect trained physicians to ramp to that level?.

And then I have a follow up. Well, that's actually a wonderful question that preps for our investor day that's coming in early September, where we can address our view on the commercial opportunity ahead of us. But I'm not going to front run with specific numbers in that regard. I will say that that embedded in that is also the health economic value from from Revita and we are finalizing our numbers now. With 50 patients with one year of follow up from Reveal and Remain, we believe that the health economic value proposition is greater than we had previously realized. That helps us gain confidence in the potential profitability from the health economic value we can deliver. With respect to your question on training, as we've observed now across multiple studies, it takes less than five procedures for a physician to feel comfortable doing our procedure.

We expect to continue the same preceptorship program that we ran in our pivotal study quite successfully, I might add, as we get new physicians comfortable with using this procedure. The benefit that we have is that the procedure that we're asking them to learn how to do leverages existing skills, doesn't really ask them to do anything that they don't otherwise know how to do, and therefore can be very easy for them to intuitively understand what needs to happen. From a patient perspective, the advantage is that this is a one-time intervention that is not... anatomy altering and has what we believe to be a very compelling safety profile that's why we think it's going to be compelling to both physicians and patients but more numbers on the model should be presented as a story in our investor day with an understanding the health economic value as well.

Great. Thanks, Karit. I have one more follow-up question regarding reimbursement, trying to get a sense if there's any remaining risk on the patient coverage side. Like what criteria do you expect payers or Medicare to impose around prior GLP-1 use? the degree of prior weight loss, BMI, documented discontinuation, et cetera, before reimbursing for a beta. Thank you.

I expect that Medicare will follow the, I expect that payers will be looking very carefully at the patient population that was studied and pre-specified in the pivotal trial. And While I can't speak to what the label might say, I would expect that the payers are going to look very carefully at this, at least 15% run in weight loss and the use of GLP-1 therapy or GLP-1-based therapy rather than terseptide specifically. And... This is an interesting conversation that we will look forward to having with Pivotal Data in hand with payers. I can tell you that in the conversation we've had in the last quarter with payers, Medicare in particular is concerned about the muscle mass loss associated with the GLP-1s and the frailty as it particularly applies to the elderly population. population, combined with the fact that they're expecting millions of people to start GLP-1s because of this bridge program, and because that program has a shelf life of about 18 months, there is clearly a view that a lot of patients will be needing to be discontinuing next year, and they're thinking hard about it. what the implications of that are. Very helpful, thank you. Thank you.

Thank you. We'll move on to our next question. Our next question comes from the line of Jason Gerberry of Bank of America. Your line is now open.

Hey, guys, thanks for taking my questions. Another one on reimbursement, upon approval, What is the expectation in terms of how the transitional coverage for emerging technologies, that you have breakthrough device designation, are there any risks to that in terms of when you'd be filing? Anything you need to be aware of in terms of the importance of filing timeline and or de novo versus a PMA filing? So that's my first question. And then secondly, you mentioned in the press release the company building out commercial infrastructure for Revita as the data readouts approach. a little bit more on those efforts, you know, what sort of size of commercial infrastructure that you believe you'll need to support ReVita. Thanks.

Sure. So with respect to initial payment, there is a mechanism called transitional pass-through through CMS that has a quarterly review cycle and a statutory requirement for payment that is actually quite clear. Breakthrough devices have an exemption through transitional pass-through. meaning that breakthrough devices that achieve regulatory clearance or approval are sort of automatically in scope so long as they are novel and so long as the price of that novel device doesn't fit into an existing price. CPT schema. So ours, we believe, fits all of those criteria. And so the applications go in on a quarterly basis. They are reviewed in a rolling manner. And so every three months, new transitional approved or clear devices get transitional pass-through payment. So we feel like the tailwinds are strong pass-through rule, the sort of criteria that I just laid out, will be in place for the next several years, and we believe we will qualify once cleared.

And that allows us to have confidence that Ruvita can have reimbursement from day one at the time of launch, which is a really strong place to be. And that ties to our view on the commercial infrastructure. We'll have more to say about this in our September Investor Day. points that I'd want to convey are that we envision a very targeted and efficient center of excellence model focused on hospitals where we already have very strong relationships. And as Mike alluded to earlier, the top 100 to 200 endoscopy sort of health systems do at least half of the endoscopies in the United States. And so all of these top centers have endoscopists are focused on doing bariatric and metabolic endoscopy, we have strong relationships there. And we will initially focus on them because we believe that health systems can funnel patients in very efficiently, enabling us to launch with a smaller team that's highly focused on high throughput.

centers. Thank you. One moment for our next question. Our next question comes from a line of Chase Nickerocker of Greg Holland. Your line is now open.

Good afternoon. Thanks for taking the questions. Maybe just first from me, Could you just confirm whether or not the final SAP was submitted and if there was any response or correspondence with the agency as it relates to some of the recent tweaks? Thanks.

Yes, final SAP was submitted. I think we mentioned that in our July call. And we are locked and loaded heading into our database lock.

you know in the next several weeks was there any response or kind of correspondence with with FDA's or you know kind of around that.

There was. There was clearly a response from the FDA. It's all sort of within the nuances. I would say that it was down in the schema of details rather than high level, nothing of materiality for us to discuss.

Great. And then just last, a little bit of a bigger picture question. But can you just remind us the extent of your patent estate as it relates to other kind of ablation technologies? particularly as it relates to weight maintenance, as we think about now having a de novo approval rather than a PMA? Can you just kind of speak to your patent protection?.

Sure. Well, one thing that I would say at a very high level is that we have a very broad and comprehensive patent estate that ties to our company being the leader in innovation in this category and being the first to develop any form of ablation efforts for the duodenum, whether that's in type 2 diabetes or in weight maintenance or in NAFLD-NASH or other metabolic conditions that you could imagine. And we have issued patents in the United States that cover not only our methods and our specific devices, but also broadly covering both thermal and non-thermal ablation modalities, not only for post-GLP-1 weight maintenance, but also for type 2 diabetes and related conditions. So we believe that we have a very strong patent estate covering any manner of ablation modality, and we intend to defend that market.

Great. Thanks, Ruth. Thank you. Thank you. We'll move on to our next question. Our next question comes from the line of Winnie Ijem of Kennecourt Junior League. Your line is now open.

Hey guys, thanks for taking our questions. This is Angela on for Whitney. So you've talked earlier in the call about more patients being on GLP-1 injectable or orals now, and that each patient is a future discontinuation. So the addressable market has really also expanded. Curious though, from your market research, are you seeing patients perhaps maybe stay on drug longer? Is that discontinuation rate still about the same at one year? Just, you know, thinking about physicians now having more experience with this class of medications and being able to titrate.

The data that I'm seeing is that patients are, all the meta-analyses I'm seeing are now suggesting that the median duration of time on therapy is still in the six to nine month range. I have not seen anything change, but I would also say the quality of our data is... is more impaired because of more people getting drugs from online pharmacies. And so the best data that we have suggests that people are on drugs for about six to nine months. And I'm very intrigued to see, but it's too early to tell, what that median duration of therapy will be on orals. But preliminarily, what we're seeing with orals is that people are staying on lower doses or not titrating nearly as much as one might have expected. And so we are going to be continuing to follow that very carefully. And then thinking about how that models into our estimation of the total market size.

But the million discontinuers a month, I think is the still like the most, jaw-dropping number and important to think about because these patients, if they've been on drug for six to nine months, have probably gotten to clinically meaningful weight loss. And now we're facing, you know, rapid weight regain based on what we've seen in our own clinical trials. It's happening in the sham arm in these patients. I expect that happening consistent with what was happening in the real world. We think we have a really huge opportunity here.

Thank you. One moment for our next question. Our next question comes from the line of Mike Ols of Morgan Stanley. Your line is now open.

Hi, this is Rohan on for Mike. Thanks for taking our questions. On Revita, can you just talk about any early thoughts on pricing and then on Rejuva, what kind of preliminary data should we expect later this year? Thanks.

Okay. So on Revita pricing, the health economic analysis that we're doing, we're going to be presenting in our investor day later this month. So it's a bit premature for me to give you that number, but we can present our view on the health economic value proposition. We will be planning to do so in just a few weeks. With respect to Rejuva, I would point you to our earlier statement that like the first most important thing for us to communicate is the safety and tolerability of Rejuva 001 through that first 14-day sentinel period and the safety and feasibility of the Rubita device delivery. And that's the most important thing because that's what unlocks the rest of the dose in the dosing cohort. And so I would point you to that as the first thing that we're going to be communicating.

Thank you. Thank you. One moment for our next question. Our next question comes from the line of Jeffrey Coleman of Lindenberg and Thalman. Your line is now open.

Hello, Harith and Laura. Thanks for taking our questions. Two, firstly, although it's a secondary endpoint, could you comment at all on HbA1c and what you would anticipate the reaction to? of Revita in early Q4 would show, and do you expect that to be comparable with previous cohorts?.

Uh-huh. So, we do have secondary analyses in the Remain Pivotal Study for effects on cardiometabolic parameters, lipids like HDL and triglycerides, and HbA1c. This is a patient population that does have like a fair amount of opioid obesity-related comorbidity, but very few of these patients actually were diagnosed with prediabetes at the time of rent. randomization. And so we, the signal that we would hope to be able to show is glycemic stability through six months in that blinded randomized trial. I don't think the HbA1c's at the time of randomization were very high. They were in the And so I don't think you're going to expect to see something more than glycemic stability, which I think alone is a very valuable thing because these patients are at high risk of going on to developing prediabetes. And that will take more time to mature in a clinical signal than the six-month readout.

to give you. Okay, that's helpful. And then as a follow-up, could you jump over to Rejuva for a moment? So I think the Netherlands study is three cohorts, three patients with an additional 20 behind that. What's expected for Australia?.

Well, it's all one study, actually. So it's not just Netherlands. There are multiple sites in an international study. And so each patient across this, each cohort across the study will have... Each cohort will have three patients across the study, whether it's in Netherlands or Australia or elsewhere. So we'd anticipate seeing nine patients by the end of the year? No, no. We have to dose the first patient, wait 14 days, see a safety signal before we can dose anybody else. So I think the thing to focus on, as I mentioned, is initial safety and feasibility of device delivery and then safety and tolerability in that first sentinel patient through 14 days.

That is the thing that is going to give us the necessary information that would then allow the dosing of additional patients based on the protocol.

Got it. Thanks for the clarification. Thanks for taking our questions.

Thank you. One moment for our next question. Our next question comes from the line of Joel Pagani of 18 Windrush. Your line is now open.

Hey guys, good afternoon. Thanks for taking the question. So my questions are both regulatory based. So first, with Revita, curious, what would you describe as the key outstanding point or points with regard to going down the de novo status, number one, and then what would you describe as the key points to be able to get to IND status in your discussions.

the FDA. Thanks a lot. Okay. So, the key point to get Revita, DeNovo, is their review of our safety data from our pivotal study. That's very clear. That's going to go within with the submission. And given the fact we have only seen blinded safety data with DSMB regular the reviews, we are very encouraged by the safety profile in the blinded analysis. The FDA will need to review that and then make a final determination. We feel good about where we stand with respect to Rejuva. Our plan will be to generate safety, feasibility and preliminary efficacy data from this OU US first in human study before coming to talk to the FDA.

We don't yet have a timeline for you on when that will be.

Got it. Appreciate the details, Harit. Yes, thank you. Thank you. And I turn the call back to Dr. Roger Cobalan for closing remarks.

Well, thank you, everyone. Investor Day next month. Appreciate the commercial questions. Look forward to discussing them in much more detail with you in early September. Top line pivotal data in early Q4. Potential de novo submission late Q4. We are one quarter away from the most important question in obesity. Thank you.

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

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Greetings, and welcome to Fractyl Health's 1-year REMAIN-1 Midpoint Cohort Data Call. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Fractyl Health website following the conclusion of the event. I'd now like to turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyl Health. Please go ahead, Brian.

Thank you. Welcome, everybody. This morning, we issued a press release that outlines the topics we plan to discuss today. The press release is available at www.fractyl.com under the Investors tab. Presenting today will be Dr. Harith Rajagopalan, Co-Founder and CEO of Fractyl Health, with Dr. Adarsh Thaker from UCLA joining to share his perspectives after the formal presentation. During this call, we make forward-looking statements, which involve risks and uncertainties that may cause our actual results to differ materially from those expressed or implied by forward-looking statements. A discussion of these risks and uncertainties is included in our filings with the SEC from time to time, including the section titled Risk Factors in our annual form -- on our annual report on Form 10-K for the year ended December 31, 2025, and our quarterly report on Form 10-Q filed on May 12, 2026, which I encourage you to review. Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of these statements even if subsequent events cause our views to change.

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

Good morning, everyone. Thank you for joining us today. We are thrilled to present strong 1-year data from the randomized REMAIN-1 Midpoint Cohort, demonstrating meaningful and durable weight maintenance with Revita, 1 full year after the discontinuation of GLP-1 medicines. The key result is that patients treated with Revita maintained up to 84% of their GLP-1-induced weight loss at 1 year compared to only 46% in the sham arm among patients who received complete duodenal ablations. This addresses the most significant unmet need in obesity today, durable weight maintenance after stopping GLP-1 therapy. The data shows something many people believe was not possible that durable drug-free weight maintenance can be achieved with a single outpatient endoscopic procedure.

We are also pleased to have with us today Dr. Adarsh Thaker, the co-lead of the UCLA Bariatric Endoscopy program and the principal investigator of the REMAIN-1 study, who will share his perspectives on the data and his expectations for the upcoming pivotal trial results. We believe these positive results significantly strengthen the probability of success of our ongoing pivotal trial. We look forward to reporting top-line 6-month data from our landmark REMAIN-1 study early in fourth quarter of 2026, followed by potential FDA De Novo submission later the same quarter. With positive 1-year randomized data in hand and major catalysts approaching, we believe now is a particularly compelling time for investors to engage with our story.

We have very strong conviction in Revita based on 4 key pillars shown here. First, the clinical signal is real. Second, our pivotal study is built to win. Third, there is a clear path to commercial value. And fourth, we are funded through definitive data later this year. For those new to our story, Revita is an endoscopic procedure that targets the duodenal mucosa or the first 25 centimeters of the small intestine just beyond the stomach. This short segment plays a critical role in metabolic regulation. Chronic exposure to high-fat, high-sugar diets cause long-term changes to the duodenal mucosa that impair normal nutrient sensing and contribute to metabolic dysfunction.

Revita is designed to ablate this damaged tissue and allow the regeneration of healthier duodenal mucosa, offering a potential new way to restore normal metabolic regulation. Revita is like LASIK for obesity. It targets the underlying cause of disease with a single outpatient procedure rather than relying on chronic medication. This approach is particularly valuable in the post-GLP-1 setting where millions of patients are looking to maintain their weight loss without staying on therapy long term. The REMAIN-1 Midpoint Cohort is our randomized sham-controlled, proof-of-concept study in post-GLP-1 weight maintenance. The study was not formally powered for statistical significance. Our goal was to generate descriptive data to better understand the treatment effect exactly as a Phase II informs a Phase III and help inform the design of our pivotal trial.

We enrolled patients with obesity with a BMI between 30 and 45 who were GLP-1 naive and did not have Type 2 diabetes. Patients were started on tirzepatide to achieve at least 15% total body weight loss. GLP-1 therapy was then discontinued in these participants, and they were then randomized 2:1 to either Revita or sham. The primary efficacy endpoints were the percent total body weight change from post-GLP-1 nadir between Revita and sham at 3 and 6 months. Today, we are presenting the 12-month data with patients and investigators remaining blinded to their treatment allocation throughout the full year. 41 of 45 randomized patients completed the full 52 weeks of follow-up. All discontinuations were due to patient withdrawal of consent. And importantly, there was no reinitiation of GLP-1 therapy after randomization.

Today's safety and efficacy analysis include all available data. When we presented the 6-month results from this midpoint cohort earlier this year, we highlighted 2 key observations that directly informed our prespecified pivotal statistical analysis plan. First, we observed a clear dose-response. Patients who received more complete duodenal ablation maintained significantly more weight at 6 months. Based on this finding, we defined the per protocol population in our pivotal study as those who received a complete ablation of more than 14 centimeters. Second, we saw that patients who lost more weight on GLP-1 therapy were at higher risk of more regain after discontinuation. In the midpoint cohort, the separation between Revita and sham was, therefore, greater in patients with higher GLP-1-induced weight loss.

Based on this, our pivotal statistical analysis plan includes run-in weight loss as a key covariate in the primary analysis. And we applied this exact same methodology to today's 12-month analysis to give investors as much read-through as possible to the potential results of the pivotal study. We are presenting data today across 4 analysis populations. The full mITT population includes all randomized and treated patients, consistent with the primary analysis in our pivotal study. We are also showing data in a high-run-in population, a complete ablation population and an optimized population that combines both high run-in weight loss and complete ablation. We believe this optimized population best represents Revita's ultimate clinical profile.

Turning to the efficacy results at 1 year. Revita clearly reduced weight regain with the benefit becoming more pronounced when an adequate dose of ablation was delivered. In the full mITT population, Revita reduced weight regain by approximately 40% versus sham, and this increased to over a 60% reduction in regain in patients who received complete ablations. The sham arm regained approximately 13% from nadir or 54% of their GLP-1 weight loss at 1 year, which is consistent with but slightly lower than the roughly 60% regain that is reported in SURMOUNT-4 and other post-GLP-1 meta-analyses. This similarity provides an important external validation for this study's findings. Looking at the complete ablation population over the full year, analyzing the MMRM that we will be using in the pivotal statistical analysis plan, patients first underwent the GLP-1 titration phase, losing a substantial amount of weight. After discontinuing GLP-1, they were randomized.

At 1 year, Revita patients retained 81% of their weight loss, while sham patients retained less than half. This large treatment effect appears durable throughout the 1-year follow-up period. Importantly, the median ablation length in our ongoing pivotal trial is 16 centimeters, meaning that a majority of patients in the pivotal are expected to have received complete ablations. Turning now to the optimized population, the right dose in the right patient. In this group, Revita patients regained only 16% of their GLP-1 weight loss at 1 year compared to 54% in the sham arm. This represents over a 70% reduction in weight regain versus sham. The pivotal cohort had a mean GLP-1-induced weight loss of over 18% during the run-in period, which suggests that a majority of pivotal participants will be well represented from this high run-in weight loss population.

Let's put this in practical terms. A patient starts at 220 pounds, loses 44 pounds on tirzepatide, weighs 176 pounds at the time of randomization. They would regain 23 pounds on sham over a year, but only 8 pounds with Revita, meaning they would maintain 36 pounds of their GLP-1 weight loss 1 year later. Turning to safety. Revita continued to demonstrate a favorable safety profile through 1 year. There were no new device-related treatment-emergent adverse events between 6 and 12 months, no device-related serious adverse events in the entire study. We saw no excess frequency of any treatment-emergent adverse events with Revita at all. There were only 4 incidents of TEAEs in total. Intriguingly, there were no new diagnoses of Type 2 diabetes in the Revita arm, but there was 1 diagnosis of Type 2 diabetes in the sham arm.

These 4 mild treatment-emergent adverse events occurred in 2 patients, let's zoom in on them, abdominal discomfort, sore throat, nausea, dry mouth, all resolved within 2 days with no further device-related adverse events at any point in the study. This is an incredibly mild periprocedural profile, especially when compared to the GLP-1 medicines that represent the only treatment alternative for these patients. We believe it supports a potentially very broad outpatient utilization for a large population. Okay. With 1-year data presented, let's now turn to our ongoing REMAIN-1 pivotal study. This trial has the same design, patient population and enrollment criteria to the midpoint cohort you just saw. It is being conducted by the same investigators using the same protocol.

So what this means is that the pivotal study is essentially a larger, well-powered version of the exact same experiment you just saw: same patients, same doctors, same protocol. This significantly derisks the pivotal results for us. Because of the strong similarity between the 2 studies, the midpoint cohort provides valuable read-through to the ongoing pivotal. Based on the data we've just shown you, both co-primary endpoints in the pivotal study are powered at over 95%. Let's take the first co-primary. It is the percent of total body weight regain in Revita versus sham at 6 months. The table shows illustrative sham 6-month regain in the mITT population versus what Revita regain needs to be in order to be able to win statistically. Hold that up against what we observed in the midpoint cohort in the mITT population, and you will see the results clear comfortably.

Let's take the second co-primary endpoint, the responder rate. The FDA-mandated prespecified performance goal is a single-arm result of at least 50% of patients maintaining at least 5% of their total body weight loss at 12 months. In the midpoint cohort, this figure was 73% in the mITT population and over 90% in the complete ablation cohort. So in summary, we saw substantial weight loss maintenance with up to 84% of on-drug weight loss retained 1 year off GLP-1 when an adequate dose of ablation is used versus only 46% in the sham arm. Given the absence of any dose-limiting toxicity observed, we see room for even further profile optimization in the future as we continue to develop our technology. The periprocedural AE profile supports what we believe to be a very broad potential outpatient endoscopic use.

And all of this translates to a well-powered pivotal with top line data expected in early Q4 2026 and a potential De Novo regulatory filing later next quarter. So with that, I'd like to turn the microphone over to Dr. Adarsh Thaker. 12 days ago, he became Associate Professor of Medicine at the David Geffen School of Medicine at UCLA, and he's also the co-lead of their Bariatric Endoscopy Program. He's also a clinical adviser to us and a REMAIN-1 investigator. Dr. Thaker?

Thank you, Harith, for the introduction, and it's good to be here this morning to review this data. As you mentioned, I'm a gastroenterologist. I've been involved in the Type 2 diabetes trials and now I'm involved in the weight maintenance program for the Revita DMR procedure. And as you mentioned, I have a busy practice treating patients with obesity and metabolic syndrome with endoscopic therapies. And when I saw these data, I have to say that I'm highly enthusiastic about the results. I think particularly compared to the data before, we continue to see clinically significant separation between the 2 groups. The separation is meaningful and appears to be sustained.

I think that one of the worries that I had and I think it was shared by others that perhaps there was no plateau in the earlier data and maybe performing the DMR procedure is not actually giving us true separation, but just delaying the inevitable with the weight gain and shifting it downstream. But I think as we start to see the curves get to their 1-year mark and beyond, we are starting to see hints of a plateau even with the small numbers in this pilot study. And so from my standpoint, I think with the numbers presented here, the benchmarks for my own clinical practice, for my partners to accept it in clinical practice and most importantly, for patient acceptance, I think those benchmarks have clearly been surpassed.

There's a lot of different ways to present these numbers. And I think that I think about how I would describe it to a gastroenterologist or even a patient or considering incorporating or undergoing these procedures, respectively. And I think that slide where Harith showed how much weight regain in the 220-pound patient, the way I would say is that if you do this procedure, to keep an extra 15 pounds off compared to just stopping the GLP-1 agent. I think that's a meaningful and powerful message. That is not easy to do. And I think that framing it that way with simplicity, I think, again, we will gain a lot of acceptance in the field and by patients. I want to highlight that I think that the dose optimization information is quite important. As we went through the study, we had our own learning curve.

We had our own kind of safety tolerance and as we saw the safety data is really, really good. And so the training wheels and kind of the kid gloves or gentle hands that we were using early on in our learning curve experience kind of came off, and we were able to be more aggressive. And for that reason, I'm hoping that these data represent a floor and not a ceiling in terms of how effective the treatment can be to maintaining the weight loss. And so I'm looking forward to the pivotal numbers. And the safety data is in line with my own observations of what patients have been experiencing after undergoing the procedure.

Kind of looking forward, as we await the pivotal results from the larger cohort, I think it's important to reflect on that there's often a difference between what we as providers want to see in terms of data and what patients actually want, particularly in a world where upcoming GLP-1 agents are revealing ever-increasing weight loss numbers. Patients don't need a grand slam. They don't need perfect separation in terms of how much weight regain they might have between this and just doing nothing, stopping cold turkey. Patients just need a boost. So even some separation I think will be good enough to get widespread buy-in and certainly keep me immediately busy from even just my own patients, my own practice. Even a 5% to 10% weight loss compared to the original baseline is linked to very meaningful health benefits.

And that's often what we counsel patients with things like fatty liver, diabetes. They don't have to get 30% weight loss, even 5% to 10% will help them. And so I think if we can -- if I can say to a patient that doing a Revita DMR procedure is more likely than not going to keep most of your weight off after you stop this GLP-1 medication, that will be enough to get buy-in. And the reason for that is that the safety data is so good and the stakes are so low. The procedure really is more of a time inconvenience. You have to spend half a day, take off a work and find the ride home after undergoing anesthesia. But why not do this? It's very well tolerated. It's a straightforward procedure. We're only going to get better and more efficient at it. And really for the -- again, the time commitment and having to go under anesthesia for a little while, the patients are being free from a pharmacologic agent.

I'll finish with kind of just an anecdote where we were in the REMAIN-1 study, but for one reason or another, our start-up and activation was towards the back end. And we were told that we only had a couple of weeks to fill our entire study cohort if we wanted to participate. And my obesity medicine partner went to work and just from her own clinic, within 1 week, we found 25 patients and filled our entire quota of participants. And that was without even leaving or advertising or talking to other people, just from her own clinic. And that's how quickly we filled the study. Now you could say, okay, maybe it was the free tirzepatide that they're getting and that was the reason that patients wanted this. But I was in the REVITALIZE 1 trial for Type 2 diabetes. And back then, we had minimal to no data, very little safety data.

And even then, patients, when they heard about the possibility of coming off of medications, the buy-in was very high. I've never had a single patient, even when I have very little data to back up my claims on what this could do, never had a single patient refuse to consent for the procedure. So I think the patient drive is strong. And I think that, again, we don't need to see grand slam numbers for myself and other gastroenterologists who do bariatric and metabolic endoscopy procedures to immediately be overwhelmed with patient demand after this procedure.

So I'm hopeful, and I look forward to seeing the overall cohort data. And I'll turn it back to Harith.

Thank you, Adarsh. In closing, we see a clear near-term path to a potential launch. Later this quarter, we're going to have an Investor Day to walk through our view on the substantial commercial opportunity ahead of us. You'll remember earlier this quarter, we hired Mike Zumdahl as our SVP of Market Access and Commercial Strategy. So he's going to walk you through our strategy to tackle this exciting new market development opportunity in front of us. And in early Q4, we will present pivotal top line 6-month data. And then, in late Q4, we anticipate our potential FDA De Novo submission.

With that, I'll pause. Dr. Thaker and I would both be happy to open the floor for questions.

[Operator Instructions] So our first question comes from Michael DiFiore at Evercore.

Congrats on the great data. So 2 questions for me. For the pivotal trial, how will dropouts be handled statistically? And separately, can you remind us of the dietary modifications in the pivotal trial? And how they will be monitored and forced throughout the study?

Sure. So Michael, dropouts are handled in the MMRM analysis that we've prespecified as missing at random and MMRM handles them through their -- through its own modeling. We will have some sensitivity analyses as well, but that's the primary analysis. Dietary modifications in the pivotal are exactly like what we have done here. You will note that there were some patients who are better about following it than others.

None of the data was excluded from this analysis, and we are confident that we have done a good job of centralizing an appropriate moderate diet and lifestyle program through centralized blinded dietitians who are overseeing the work of individual site level dietitians at every clinical trial site. It's literally the same diet and exercise program that all of the GLP-1 studies have also run, 500,000 calorie deficit plus some exercise recommendation each week.

Our next question comes from Whitney Ijem at Canaccord.

Congrats on this update. A question for Dr. Thaker. I guess, can you -- what are you currently offering patients who come to you for endoscopy-based procedure, obesity patients who come to you for an endoscopy-based procedure? And can you maybe compare and contrast how these data compare to those options?

Sure, Whitney. Right now, the primary procedures we perform are endoscopic sleeve gastroplasty. So it would be a suturing-based procedure where we're reducing the size of the stomach through the mouth. And we use that as an alternative to patients who may undergo surgical sleeve gastrectomy but don't want to have the incisions or the aggressiveness or changes in surgery. And then followed by that is actually revisions of patients who had actually already had bariatric surgery and need tightening because their anatomy has become dilated. With the primary ESG, I'll talk mostly about that one, but typically quote patients is having between 14% to 17% total body weight loss at 1 year.

That's the average. Real-world numbers vary significantly based on diet and exercise programs and settings, but that looks to be around the number. So I think it's a slightly different procedure because we are doing that primarily for weight loss. It's something that I'm certainly interested in looking at to see if that can be used as an off-ramp for GLP-1, but I don't think that the physiology alteration is as good as what we're doing here in the duodenum. In the duodenum, we're not changing the anatomy. We're trying to restore a normal healthy gut tissue physiology. And so I see no reason why you couldn't do this in combination with the ESG either at the same time or in tandem and really see if we could start to meet surgery level numbers by doing everything endoscopically.

Got it. Really helpful. And then just one quick follow-up for the company. I think in the previous randomized cohort data, you talked about the p-value and kind of the -- with an understanding that this is a small n and read-through to the pivotal. Unless I missed it, can you remind what did you see as a p-value here? Just kind of curious how that compares to the last update and read-throughs to the pivotal?

Well, we have not powered the study for formal statistical inference, you can look at the standard error bars, and you can see that there's clear separation. There is no question that what we are seeing is going to be highly, highly statistically significant if it continues in the pivotal trial.

Our next question comes from Chase Knickerbocker at Craig-Hallum.

Maybe just 2 for Dr. Thaker to start. We greatly appreciate your thoughts as far as kind of what the level of efficacy that needs to be seen in the pivotal for however you want to define it, but substantial adoption of Revita in your practice ultimately, if approved. So is that bar however you want to define it, whether that's retention of weight loss or kind of absolute weight loss from GLP-1 baseline? Just your thoughts there would, I think, be really helpful to contextualize this for us.

Yes. I think the second point that you made is the easier way, how am I going to describe this to my partners, to referring physicians, or to patients, which is from the original start before the GLP-1, how much weight can we keep off if we did a one-two punch of GLP-1 and then DMR to get the patient off of it? And I think that even 5% weight loss maintained compared to the original baseline would be a win. 10% would be great. And that would mean a lot of the other endoscopic procedures I do and have meaningful health benefits. So I believe that's one of the secondary study endpoints where if we can keep more than 5% total body weight loss from the original baseline after a DMR treatment, to me, that would be enough to offer this to patients. And if it's more than 10% from total body weight baseline, then I think that it will be a very popular and an easy sell.

Got it. And then maybe just second, as you've had greater experience with Revita, done more procedures, maybe just talk to us about how your kind of comfortability going longer with the ablation length has progressed and then also kind of the time to complete the procedure, how that's developed? And kind of how the level of complexity here compares to some of the other things that you do in your practice?

Yes, certainly. This is really the first time anyone's bothered to go after the duodenum like this, even though we've known that it's a key regulator for the metabolism. And one of the reasons that duodenum is it's thin-walled and it has a rich blood supply. So we've always been afraid of complications. The other major complication we were afraid of is pancreatitis. So early on, particularly in the diabetes studies and for providers who had picked up the device for the first time for this study, we were being very careful and of trying to not overdo it. And as a result, we ended up, I think, in many ways, underdoing it.

And that's why you're seeing not every patient achieving this dose optimization, optimized dose length, which roughly to me, translates into 7 ablations. Can you do more than 7? As I got more comfortable and the way that I would teach it to now to someone who is picking it up for the first time, I would say that the duodenum can take it. It turns out the data and again, my own experience has shown that we don't need to be so careful. So while before we were obsessing over avoiding overlapping treatment areas, avoiding going too far, avoiding starting too close to the beginning of the duodenum, now we can be more aggressive without sacrificing safety. And so we can start pushing the bar. And I think that's a learning curve that I had to go through that just with simple training and coaching, other providers won't need to. So I think that we can get that into their hands. much more quickly to make sure we meet that benchmark of 7 ablations or more.

And how complicated is this?

At the moment, it is -- there was a little bit of a procedure and a technical learning curve of driving the catheter, et cetera. There's a lot of work being done to democratize this procedure really to make it as easy and as quick as a screening colonoscopy. And when you think about how many people -- I think the number needed to treat for screening colonoscopy is like 450. So the reality is that most patients that were doing screening colonoscopy are not being helped by that procedure, whereas I think with this, we're going to see a lot more meaningful benefit on an individual level.

So I envision a world where you could do this in line with or even at the same time as a screening colonoscopy one day. And I think that's the goal to make this under 30-minute procedure that can be done by any gastroenterologist who wants to. And so we're working hard to make that happen.

Our next question comes from Chi Fong at Bank of America.

This is Chi on for Jason. The first one that I have here is I want to revisit Slide #15 from the corporate presentation where you provide some nice sensitivity analysis on what Revita need to hit in the pivotal cohort data for it to be statistically significant. And curious your thoughts about the base case assumption of 11.6% weight regain from the sham arm in 6 months. If I recall correctly, the 6-month data from the midpoint cohort the sham arm regained 7.5%. So if you can talk about the differential assumption there, that would be great. And in the event that the sham arm did perform more similar to the midpoint 6-month data, 7.5% weight regain, what would you need -- what would Revita need to hit to still hit that? Say with the 5.1%, they'll be sufficient or not? That would be my first question.

Yes. So great question. Bottom line is that the 5.1% and the 11.6% that we're showing here are measured in exactly the same way as the pivotal statistical analysis will be conducted. And that explains the difference between the number that we reported back in January and the number that we are reporting now because we're taking run in weight loss as a treatment interaction term as we laid out on in one of the earlier slides. So I think you can see that the Revita regain needed to win is -- the delta versus the illustrative regain in the mITT population is roughly 2.5 percentage points. That is the number that we would need in order to feel comfortable regardless of the methodology used.

Got it. And my second question is that under the De Novo pathway, do you think that the 1-year midpoint data that you have today, coupled with the 6-month pivotal data in 4Q could be just sufficient for approval consideration? Or do you think that even in the De Novo pathway, would the FDA still require the 1-year data from the pivotal cohort for registrational purposes?

I've never known the FDA to turn down the opportunity to see all of the data that's available. I expect that they're going to want to see the 12-month data as well.

Okay. And my last question is for both the company and KOL. Based on the cumulative data you have seen today, do you have any thoughts on the proportion of patients who could be retreated with Revita, meaning, treating multiple times? And what would be potentially be the retreatment interval could be, or frequency?

Adarsh, do you want to talk about retreatment potential, and then I'll talk about what we think about intervals?

Yes. I think that it's a little bit of a different situation than, say, someone with diabetes. But I think that, let's say, I had a patient that was suboptimally responding after one treatment. Really, I don't see any reason why I couldn't go back in there and retreat them. I'm aware of data that's being worked on in Europe to kind of help answer this question. But once they've healed up, which we believe happens within months, I personally don't really see a reason why we couldn't offer a retreatment.

Maybe there were some spots that I missed or maybe it didn't stretch the right way or something like that. So to me, I would say it would be a little early to make any judgments before the 6- to 12-month mark, which is similar to what I tell patients who have an ESG procedure and are not losing the expected weight before we would do a retreatment. From a practical standpoint, I think from -- to me, the anesthesia is becoming the riskiest part of this procedure. So if a patient can undergo the sedation safely and I could reach their duodenum with the catheter, I don't see any reason why I couldn't offer this to most patients that want it from a health standpoint or anatomic standpoint.

And I'll just add that in our Type 2 diabetes work, we've seen durability out to 2 years. We're encouraged by the plateauing of weight regain that we are beginning to see in this cohort. And if you especially combine that with the 20 or so patients from the REVEAL Open-label Cohort, we're seeing a very consistent pattern of treatment separation versus the expected regain. And obviously, 18- and 24-month data are expected -- 24-month data are expected next year, given the fact that we just filed with the FDA and gotten a protocol accepted that allows longer-term follow-up.

I have no concerns about the patient's acceptability of a retreatment frequency that's measured in 18 to 24 months or more. And -- but at the same time, I don't think that, that's going to be necessary. In this cohort, 20% of patients actually lost further weight even after stopping their GLP-1 at 1 year. In the REVEAL Open-label Cohort, over 30% of patients lost further weight. So I think that this is a therapy that could have very long-lasting effects and retreatment seems to potentially be quite safe and achievable and acceptable to patients. So we love the profile that is emerging.

Thanks so much for the update, and we look forward to the 4Q pivotal update again.

Thank you, Chi.

Our next question comes from Rohit Bhasin at Morgan Stanley.

This is Rohit on for Mike. Have you had any recent discussions with regulators? And are there any updates you can share regarding the De Novo pathway? And then can you also share any preliminary plans in place for commercialization?

Okay. With respect to the De Novo pathway, no new information than what we already shared in our last earnings call, which I would refer you. We feel like we've gotten favorable feedback from the FDA on the De Novo pathway. Ultimate decisions will be made once they have a chance to review all the safety data with our submission. But given the safety profile you're seeing here, our blinded view into safety through DSMB interactions in the pivotal, we feel very confident that we are well on our way towards a De Novo pathway.

With respect to commercial strategy, -- we have added some new slides on this in our investor deck, and we are really excited to walk you through that and some of the health economics work that we've been doing with Mike's leadership now that we will walk through in more detail at our upcoming Investor Day, more on that to come.

Our next question comes from Jeff Cohen at Ladenburg.

This is Destiny on for Jeff. Congratulations on the strong data. I wanted to go back to.

[Audio Gap]

The greatest benefit in patients with the greatest need. I'm wondering, do you feel as though that's the most clinically meaningful data point? And then one for Dr. Thaker. How do you see yourself integrating this into, I guess, you call it the workflow when a patient comes in, are you starting them on a GLP-1 and then waiting for them to say, I think I'd like to stop taking this? Or are you saying here's the strategy that I've seen work and here's probably what I would recommend for you? If you could just share your thoughts on that, that would be super helpful.

Dr. Thaker, why don't you go first and then I will answer her question for me.

Yes, that's a great question. And I think that there's multiple patient journeys that I could foresee. I would have an immediate injection of patients who are already on a GLP-1 and are looking to stop it. In fact, I think most patients that are on it would say that they'd be looking to stop it. So that would be the first group that would immediately make me and my colleagues busy doing these procedures. But I think kind of -- so that's the first step. The second step would be getting the word out to endocrinologists and primary care providers that are either managing obesity or already treating patients with GLP-1s.

And I think what you said is a great idea that, yes, I would present the whole treatment journey as one. So that it's a one-two punch that we can start tirzepatide or another agent. And then once they achieve their desired kind of weight loss goals, then we do the procedure as a 1-2 punch and do it right away. And I think that, that is going to be very attractive that they not only get the benefit from the therapy, but there's a clear off-ramp in sight right upfront. And so we -- again, we would immediately be overwhelmed with demand just from our own clinics and then from people who hear about this finite treatment option.

And then I'll talk about the patients with highest need. There's no question, the more weight you lose on a GLP-1, the more violent and uncomfortable that rebound is. Everybody understands that. The better the drugs become as we go from tirzepatide to ritatrutide and other agents, the more potent they are, the faster they achieve weight loss, the greater the need for a safe and effective off-ramp that can prevent that weight regain from happening. Every physician understands that. Every patient is hearing that. And so that becomes the easiest, most accessible population in whom to advocate for a therapeutic option like this because the alternative is the worst.

And so at the same time, as long as doctors are able to do more than 7 ablations in a setting or like greater than 14 centimeters, I'm confident we can offer benefit to a large swath of patients. And part of the greatest benefit, the effect size that we're talking about here is really about the, let's say, the clinical trial design requirements of a double-blinded sham-controlled study where effect size is going to dictate perception of the therapy. But in the real world, I think that physicians are going to be able to offer this to a broad swath of patients on label.

Our final question comes from Lander Egaña-Gorroño.

This is Lander on for Joe. Congrats on the data. So maybe can you remind us what was the average ablation length in the complete midpoint cohort?

The average ablation length in the midpoint cohort was a little bit lower than what we have in the pivotal. The mean -- it was roughly 16 centimeters in the midpoint cohort, and it was over 16 centimeters, closer to 17 centimeters in the pivotal cohort. And this is a reflection of new investigators climbing the 4 to 5 procedure learning curve to getting them to a point where they were able to feel comfortable ablating a longer length as Dr. Thaker already laid out.

Awesome. And also, just curious at the 1-year time point, anything that can be highlighted from the clinical sites in terms of patients' adherence to diet and lifestyle requirements?

Dr. Thaker, do you want to talk about adherence to diet and lifestyle at your site?

Yes. I mean I follow this a little bit loosely because I was the unblinded investigator who did the procedure. But from just chatting with my obesity medicine partner, I think we have fortunately a good retention rate at our site. And it seems like most patients are still -- even though the ones that kind of can figure out that they got the sham, I think they are still adherent, but I wouldn't be able to speak on an individual level. But at least dropout appears to be low, even though I think patients are starting to realize that there is a clear separation even themselves.

So we'll see. But the other thing I would tell a patient is that though the diet and lifestyle is important, I'm hopeful that at the end of the day, because we are addressing the underlying physiology and not trying to change their lifestyle necessarily, I envision a day, one day where we don't have to be so obsessed on that. But right now, when we're trying to perform best practices, we will continue to kind of package it as a full program with the diet and lifestyle interventions.

Thank you.

Thanks for the questions. So this concludes our Q&A session and our event for today. We thank you for joining, and you may now disconnect.

Good day, everybody. We're going to get going here at the BofA Annual Healthcare Conference and our last company presentation with Fractyl Health. My name is Jason Gerberry.

I am -- I cover pharma and biotech here at BofA, and we're joined by Harith Rajagopalan, Co-Founder and CEO; and Lisa Smith Weber (sic) [ Lara Smith Weber ], CFO. So thank you both for joining us here at the conference. Glad to be here. Thanks.

Thank you.

So maybe just get things started with a little bit about Revita, your lead program and a little bit of the why, if you will, what you're looking to solve for, how you're looking to improve upon outcomes for individuals with obesity.

Sure. So Revita is duodenal mucosal resurfacing. It's a catheter-based technology to ablate the duodenal dysfunction that we believe is a root cause of obesity in type 2 diabetes. And our lead indication is what we think to be the largest problem that remains in obesity today, which is how do you achieve durable weight loss maintenance in the absence of ongoing medical therapy.

I think it's pretty obvious that GLP-1s have transformed the treatment landscape and have demonstrated extraordinary weight loss, but most people stop taking these medicines within the first year of therapy. The more weight they lose, the more rapidly they regain their weight and whatever metabolic benefits that they had go away as their weight comes back.

So there is a deep urgent need for a durable weight maintenance solution. I think you kind of saw from Eli Lilly's data this week in the European Congress of Obesity (sic) [ European Congress on Obesity ] that their approach to trying to tackle that problem is by adjusting the doses of their medicines, which is of some modest effect, but it doesn't actually address the patient need, which is a durable non-pharmacologic weight maintenance solution, we believe we have the first one.

Yes. So in the U.S., it's probably something like 5 million to 7 million people on GLP-1-based therapies currently. Do you have a sense of how many people are off, have tried and have come off?

5 million to 7 million was probably -- well, maybe the right number if you account for all of the churn. But the most recent stats are 1 million people are stopping the GLP-1 each month in the United States.

Interesting number.

1 million people are stopping each month. I mean that just goes to show like how large -- that's for a variety of different reasons. Obviously, cost and access, side effects, but increasingly recognizes the idea that people just don't want to be on medicines to control their weight for the rest of their lives. Once they get to a plateau weight, they're beginning to look for an off-ramp and they'd rather not be on the medicines than on them.

So as you think about maybe framing Revita versus some of the pharmacotherapy alternatives being developed, right, to sort of fill that void, right, amylin targeted approaches or even siRNA-based treatment approaches, do you have a sense of how much that is cost versus not wanting to be on medicine for whatever reason?

I think that cost is a driver, but I will tell you that in Massachusetts, Medicare and Medicaid were covering it with no co-pay to patients and GLP-1 discontinuation rates for obesity was 60% at 6 months, even if you take cost off the table entirely. So I think for some people, cost is a consideration. But I think for others, just the complexity of ongoing access and the need -- the refills and then insurance sort of constraints combined with side effects and ongoing burden, I think they're all inseparable to one another.

They just add to the churn and friction of the ongoing management. And when you talk about amylin and other alternatives, I would say like none of them that I see is really solving the friction associated with ongoing pharmacological management of the condition. I'm going to stipulate that more than 50% of patients who are wanting to or needing to stop GLP-1s will not be satisfied by the drugs in the pipeline. Okay. So you made analogy, I think, to LASIK.

And I think it's an interesting analog because LASIK is very effective. It can be done relatively quick in a noninvasive way. And it works really well, right?

So maybe how do you think about if you think about the history of LASIK and when it really started to catch momentum, like what the proof point was or the aha moment where it really gained traction with the masses.

Was it -- I imagine in the early phases like, wow, I want to do this in my eyes, like I don't want to be the early guinea pig, right, versus after a few years, it's being done, people see how well it works, how high rates of lack of safety issues emerge that then it sort of catches momentum. Like just thinking about it as a commercial analog.

Yes. I think that there is some aspect of asking what is the tipping point. The difference -- I know we call Revita like LASIK for obesity for precisely the reasons that you mentioned. As we've been running our pivotal study for post GLP-1 weight maintenance, though, I would say there's one difference that might speak to the marketability of Revita in this indication, which is obesity is a chronic heterogeneous disease.

It has so many different patient journeys. Each individual patient is unique. But the time point of discontinuation is an acute moment of need for that patient for which there is no alternative today. So it is very much like LASIK in that it is a onetime procedure that we believe will have long-lasting effects and can rid the burden of ongoing management.

But the marketability, I think, is actually easier because there is this acute need. The moment when the patient needs to stop taking the medicine, what are they going to do, that equivalent does not exist with LASIK.

That's what creates an extraordinary opportunity that I think is going to be highly attractive to patients right out of the gate.

Okay. So you have 1-year data REVEAL-1, 2Q, you have REMAIN-1 midpoint cohort 3Q. Maybe just talk about the clinically meaningful threshold here. What's a great outcome for you?

Yes. So 3 major catalysts from our weight maintenance program over the next 6 months. An open-label cohort, REVEAL, will have the first 12-month data. You would expect these patients lost over 20% of their body weight on a GLP-1.

All of the data that we see suggests that they should -- they will have regained about 15% total body weight by 1 year, cutting that by more than half. So less than 7.5% weight regain at 1 year, we think would be a phenomenal result.

Turning to the remain midpoint data. That's our first randomized sort of Phase II equivalent study, 45 patients, 2:1 Revita versus sham. We will see 12-month data in Q3. There, too, we expect the patients will -- that the sham arm will have regained roughly 15% of their body weight by that time. If we can cut that in half by 7.5% or less regain in the Revita arm, then I think we have a very compelling clinical profile that will have stood the test of a rigorous prospective sham-controlled study.

And those 2, I think, are good setups for the pivotal trial, which is fully randomized and is like has shown an excellent blinded safety profile. And we will expect to see that 6-month co-primary endpoint in early Q4 and the totality of that will be the basis for our potential De Novo regulatory filing at the end of this year.

Yes. Can you just remind us the regulatory bar versus the commercial bar?

Sure. Yes. So the regulatory bar is lower than the commercial bar, I would say, clearly. Because the FDA has reviewed all of our safety data across the studies that we've conducted, they've, in some sense, down classified the risk profile for Revita from a potential Class III or high-risk PMA device to a Class II low to moderate risk De Novo pathway.

De Novo pathway, because it's lower risk, also has a different efficacy threshold and that efficacy threshold would be considering the totality of clinical evidence or in FDA parlance, reasonable assurance of safety and effectiveness as opposed to valid scientific evidence, which people interpret as like in the PMA, like a single definitive p-value.

Yes. Okay. Maybe talk a little bit about how Revita impacts the patient's metabolic profile, how important those parameters are when you ultimately provide more detailed data and subsequent updates?

So in our REVEAL open-label cohort and in our midpoint pilot data, what we have seen is protection from HbA1c increase. We have seen an improvement in cardiometabolic lipid profiles, a reduction in triglycerides, increase in HDL, substantial improvement in the triglyceride to HDL ratio.

And we will also see from the pivotal study, DEXA scan results in individuals who are discontinuing tirzepatide, randomized to Revita versus sham to look at body composition metrics in order to understand the impact there. So I think that the totality of the clinical evidence that we've seen so far suggests that Revita has a broad metabolic benefit.

It's like hitting a metabolic reset button. And that affects cardiometabolic lipids, glucose, weight, sugar craving, we'll be seeing body composition for the first time. I think that adds to the clinical and medical need beyond just the patient desire and need to be able to maintain body weight.

Yes. Okay. And durability, I imagine, is going to be an important part of the story, and that will take time to evolve. But as you sit here today and if you're able to show what you aim to show at like 12 months, how should investors think about this as a single one and done versus a retreatment dynamic and the frequency of that as you sit here today?

And maybe part of it is like what's commercially viable too, right? How often are people going to want to redo the procedures?

I think 1-year durability is the -- is like the sort of the minimum bar threshold for durability from a commercial standpoint. We've seen in type 2 diabetes 2-plus years of durable efficacy. I don't position Revita as a one-and-done treatment. I think about it as something that may need to be repeated in a fraction of patients after several years.

And as you say, we're going to have to see what that looks like. We will be looking at weight trajectories as some indication of what that durability profile looks like. And from 6 to 9 to 12 months, what does that weight look like it's doing in the sham arm versus what it looks like it's doing in the Revita arm? -- it's an opportunity for me to say that the science has advanced in this space quite a bit in the recent past.

And it's quite clear now that people who stop -- who've lost significant weight on a GLP-1, when they stop that medicine, they sort of exponentially return to their baseline weight over a period of about 18 to 20 months. And so you see that over and over again from Lilly and SURMOUNT and Novo data that the weight -- the initial weight regain is quite rapid and then it begins to plateau as you get closer to your pre-tirzepatide weight.

What that basically shows that the drugs are not doing anything to alter the predrug weight set point. Our hope and our expectation is that Revita will thoroughly reset that weight set point at a lower level. That is a profile I would argue that none of the pharmacologies has the potential to offer, but it will take time for that to get elaborated.

Yes. Okay. And then when we look ahead to 4Q and the REMAIN-1 pivotal cohort, what sort of outcome do you think would enable a regulatory filing off the basis of that?

Obviously, a positive p-value. And I think the sort of -- the constellation is we're very encouraged by. We think we're very well powered to hit a statistical significance on the full cohort in the REMAIN-1 pivotal study. We are also quite convicted that particular enrichment subgroups, those patients who get longer treatment length of ablation and/or those individuals who lost more weight during the GLP-1 run-in phase will have substantially larger effect sizes even than the full cohort.

And so we will be presenting data not only on that primary endpoint, but also those key secondary endpoints for which we have prespecified like alpha spending criteria in order to be able to give what we think will be a differentiated and compelling and complete clinical profile by that early Q4 data.

Yes. Okay. And then maybe just talking about the procedure and the dose response and greater ablation length. And what aspect of weight maintenance do you think this greater ablation would lead to greater response rate, deeper response rate and/or just durable response?

I mean let's take -- let's just start with what we know in the field. Semaglutide 1 to 2 milligrams is sort of peaking the efficacy on glucose lowering, but 1.5 to 2.4 milligrams is where you're beginning to see its effect on weight. So the dose response curve of the GLP-1 drugs on glucose is different than the dose response curve on weight.

We're seeing the same thing. Our first-in-human study in the type 2 diabetes trial, we saw that 10 centimeters of duodenal mucosal ablation was more effective at glucose lowering than less than 5 centimeters of ablation. Now what we're seeing in our first sham-controlled study in weight maintenance is that patients who get more than 14 centimeters of ablation have better protection from weight regain than people who get less than that.

So the glucose and cardiometabolic benefits are achieved with shorter lengths of ablation, but longer lengths of ablation are necessary for the weight effects happens to be just like what we saw from the GLP-1s.

Yes. Can you just remind the listeners just in terms of the greater ablation length, how the trialists are going to be incorporating that in and the data that we get, how that will be split between greater ablation length versus shorter ablation length?

So our per protocol analysis, which is going to -- is a prespecified key secondary endpoint will be in those individuals who get more than 14 centimeters of ablation versus those who got versus sham. What we have advised physicians -- and we just came out of the Digestive Disease Week meeting where we talked about what we are observing in ablation length and how that informs our interpretation of the pivotal and also training for physicians if and when commercially available.

For your listeners, the way to think about it is we know from preclinical models and human studies that duodenal dysfunction extends basically from the proximal duodenum through the end of the duodenum and even into the proximal jejunum. And so we've always surmised that there will be a length-dependent effect on cardiometabolic and weight outcomes. Now what we've done is quantified it for the first time and come up with thresholds that we believe will be very clinically meaningful and achievable for physicians.

It's gratifying for the GI doctors to know dose-dependent effects are there. That gives them conviction that the biology signal is real and that the mechanism is valid. And it also helps inform how we plan to train physicians to perform the procedure in a scalable but reproducible manner in order to ensure that patients have good outcomes when it's broadly available.

Yes. So I imagine would you envision that the longer ablation length based on what you know today is probably going to be the more likely approach commercially if approved?

Yes, in weight maintenance and in diabetes, that may not be necessary. A shorter ablation length may be adequate.

Okay. And then how would you frame the -- any safety risks, unknowns with a greater ablation length as we sit here today? Are you able to glean anything just from blinded safety assessment? And at this point, all the patients enrolled.

All the patients are enrolled. All the patients are randomized. I mean, to put it glibly, we have ablated hundreds of feet of duodenum through our pivotal program, and we have had an excellent safety profile, and there does not seem to be any correlation between ablation length and safety and tolerability.

That's not an accident. I think it's a direct result of our product development team's excellent work in developing a very reproducibly delivered ablation energy that is -- that does not cause -- that has a very, very low risk of injury.

Can you speak at all to like learning curve, how easy it was for investigators to incorporate the longer ablation length and just consistency of that approach when implemented in a trial?

Yes. So we've always -- we've said all along, it takes about 4 to 5 procedures for a physician to learn how to do this well. And that's been anecdotal from prior clinical experience. We were able to prospectively evaluate this in the study as we got physicians to learn how to do the procedure, and we monitor how long the procedures were taking, how many -- what length of ablation they achieved as a function of the number of procedures they had done.

And we reaffirmed that 4 to 5 procedure number as being completely accurate. We got every physician to be able to perform adequate length of ablation within that envelope.

Okay. And then you talked a little bit about the protocol violation leading to some data variability in the midpoint data. Do you feel the risk is largely behind the company now? Just thinking about the pivotal cohort.

We feel like the risk is behind the company now. We put the data out in January. There was site level heterogeneity. We feel like we've got a good handle on the sources of that heterogeneity.

We explained in our March earnings call what we found, and we have 2 additional opportunities to reassure investors on those questions from the REVEAL data coming up at 12 months and the REMAIN midpoint data coming up at 12 months. We like what we're seeing. We feel very confident that it's behind us.

Okay. And then coming back to the 1-year midpoint data in 3Q, the expectation around robustness of that versus the pivotal cohort at a similar time point and just given that what we discussed about ablation length and any protocol deviations.

So I would expect that the REMAIN-1 midpoint at 12 months is going to give you a very good visibility into the duration of effect at 12 months in the pivotal. It's designed very similarly.

I feel like the issues that we identified in some sense have washed out as the patients have gone through 6 and now 9 months of follow-up. What we are seeing suggests to us it's going to give you very good visibility into what you would expect to see from the pivotal.

Okay. Maybe with respect to like the type of clinical trials that pharmacotherapies are conducting and then you think about the De Novo pathway and how physicians will view the robustness of that, thinking more about commercial implication here, right?

I guess, do you think that physicians are going to have any differing view on the robustness of that type of data package versus say, an RCT type of data set that you see for megapharmacotherapy?

We have an RCT data set coming. We have -- this is a robust level 1 prospective randomized, double-blinded, sham-controlled prespecified statistical analysis plan. We feel very good about the study design. It's actually the largest sham-controlled study ever conducted in endoscopy.

It is the most rigorous sham-controlled study ever conducted in GI endoscopy as well. I don't think that there's anything that we're compromising. The De Novo pathway is simply an acknowledgment of the fact that this is a procedure that has demonstrated an incredibly like well-tolerated, low adverse event rate that is very time limited. We have never seen a late adverse event, say, unlike a pharmacotherapy where you're thinking this person may have to be on this medicine for the rest of their lives.

And so you -- and so the safety threshold in some sense, if you think about the risk-benefit curve, like that the risk can persist on these medicines forever. Whereas a risk-benefit curve for a procedure like ours, like if you think about it on XY-axis, the risk essentially drops to near 0 within 7 to 14 days.

And so I think that what you're seeing in the FDA's willingness to call this a De Novo is a reflection of their comfort with the safety profile. It is not in any way an aspersion on the quality of the efficacy data that we're planning to generate.

Okay. And then successful and approved, maybe just a little bit on the go-to-market strategy. What this world looks like in terms of endoscopists. I imagine that's going to be the focal point. How many of them are there? How much resourcing would you need to put behind something like the marketing the Revita procedure?

We believe we can get to profitability with a very targeted and efficient commercial model focused on the top 100 to 200 centers in the United States. And so assuming that we choose to do this on our own, we have excellent relationships with the GI endoscopists at the major centers where we would be launching this product.

We've built that relationship and credibility over years of being leaders in advancing the science and working with them on our pivotal program. Many of them have been investigators or part of the CEC or part of the DSMB. So that clinical community is intimately familiar with Revita and its potential. They're excited for its potential introduction. Those physicians have a lot of sway in the decision-making at major hospital centers because the endoscopy suite is a top 3 positive contribution margin to a hospital's bottom line.

So if a GI endoscopist has a new procedure, which is reimbursed, can deliver a positive contribution margin, they will get what they want. And we have already heard very clearly that they have ample endoscopy capacity in order to be able to support a potential launch of this therapy.

To that point, can you elaborate a little bit how this would play into their workflow and their work streams, time commitment, right? Like -- and what they may need to make a trade-off on? Because I imagine they don't -- sitting with extra time, right, there's probably a trade-off with something to work this into their workflows.

Correct. So Revita was purpose-built to fit into their endoscopy workflow. We require an endoscopy suite that has fluoroscopy or sort of x-ray capability. Most endoscopy centers have more X-ray fluoro time sort of capacity than they have the procedures to fill it with.

So roughly 50% of their fluoro time is consumed of those rooms are consumed with procedures that need that room and the other 50 are done there just to be able to use the extra space.

What we are hearing over and over again is that the physicians who would do our procedure would hand off the lower contribution margin, simpler procedures to other colleagues to allow them to spend more of their time doing these high-value procedures. And that is like very clearly how this would roll out.

Yes. So as we think about this ecosystem of treatment, right, like it's obesity clinics, primary care, oral therapies, it's a very consumer-driven market, a lot of cash pay, more cash pay than anyone had thought on the pharmacotherapy side.

So what I wonder -- I'd imagine these endoscopists aren't driving a lot of that volume, right, to say, hey, maybe patient XYZ, you should consider that. So there probably needs to be some awareness build, right, for the masses around Revita. So how does that get accomplished, do you think?

We've signed a letter of intent with a nationwide provider of bariatric and metabolic endoscopy services. It was called Bariendo. They just recently changed their name to Everself. When they run an ad in the Dallas area on TikTok and/or Instagram, 80% of the people who respond are on a GLP-1 and looking for an off-ramp.

So the physicians are -- these centers are actually already learning how to engage with consumers where they are with social media. And there is an incredible pent-up demand for a GLP-1 off-ramp that we think we can tap into.

Yes. Do those dynamics still hold? Do you feel like the rollout of oral therapies, which started at the beginning of this calendar year with oral Wegovy and now Foundayo, the Lilly product, do you find that -- because really, when Lilly was studying Foundayo, even did the ATTAIN-MAINTAIN trial, right, as a "off-ramp" for injectable.

And I think patients who went from Sema generally like maintain most of their weight reduction, right? So I'm just kind of curious, do those dynamics in principle still hold in your mind with the rollout of oral therapies and how that will evolve?

The fact that they're running the ATTAIN-MAINTAIN study, I think, gives you a very strong indication of the unmet need that they don't really have a good answer to, in my view. There is not a patient who's on tirzepatide doing well and losing weight who said, if only I could turn this into an oral. They either want to stay on their medicine or they want to get off their medicine altogether.

They're not really interested in switching to a different medicine. And my big takeaway from the ATTAIN-MAINTAIN is that it requires a lot of fiddling with dosing over time, which patients are actually not interested in at all. So I can see why that study meets the needs of the GLP-1 manufacturers. I don't see why it meets the needs of the patients.

Back to your question on the oral. -- where we see greatest uptake is in individuals who are not beginning the injectable at all. And so that's how you get from 10 million users of a GLP-1 to 30 million initiators on a GLP-1 because there's going to be a lot of people who don't even want to start the injectable in the first place. I'll give my mother, okay? My mother could use a GLP-1.

She doesn't want to inject herself because she wants to travel and she doesn't want to deal with the cold storage necessary for the injectable. Now that Wegovy and Foundayo are available, she says, okay, now this is an easy thing for me to do because I don't need to be worrying about how -- where I'm going to be keeping my needles and my syringes when I travel between point A and point B. And then she's like, but the problem is, do I have to take this for the rest of my life?

I think about my mother is like a perfect example of like what the issues are. Even if it's an oral, the idea that you have to be wedded to that medicine to keep that lower weight for the rest of your life is a problem in the patient's mind, a problem that needs a solution that we think we can answer.

Okay. And then maybe we have about a minute left here, but Rejuva, some updates there. Maybe if you can just talk about what are the -- as you see the upcoming milestones for Rejuva now with the clinical update.

Rejuva is a smart, potentially one-and-done GLP-1 pancreatic gene therapy. We just got regulatory clearance in the Netherlands to begin a first-in-human study. I think this is a landmark moment in type 2 diabetes therapy development because our target product profile for Rejuva in type 2 diabetes is remission of disease. That does not exist in type 2 diabetes.

We believe it is achievable based on what we've seen in the preclinical data. And we're excited that we will be able to potentially dose first patients pending site activation and then begin to see preliminary data in the back half of '26. What you will expect to hear from us on this as you go forward through the year is the first patients getting enrolled and then the first patient getting treated within 1 or 2 weeks, we're going to have a signal on safety, feasibility and tolerability, key initial questions.

And then at around 8 to 12 weeks, we'll be getting CGM data that will look at the initial pharmacodynamics on glucose lowering after the gene therapy. If we see a safety or tolerability issue in the very first cases, we'll pause and we'll try to understand what that is.

We'll obviously let people know. Once we start to begin to roll out the PD, we're going to be wondering -- we're going to be keep wondering what is the dose that allows us to get a substantial plurality of patients to potential remission. And if we have that, that would be the trigger to move on to larger studies.

Okay. And then Lisa (sic) [ Lara ], just quickly, cash runway and strategies to extend?

Yes. We put out our quarterly results on Tuesday, $63.2 million was our cash balance at the end of Q1. I think a couple of things. We are funded into 2027. That is our cash guidance.

Importantly, that is through the pivotal data readout that Harith talked about in Q4 as well as a potential De Novo filing. So we feel like we're very well funded, and we'll have about 5 to 6 months on hand at that time, and we're looking at different options to have some optionality to do that, whatever that next funding event may be at that time.

All right. Great. Well, thank you both for joining us.

Thank you. Appreciate it.

Thank you. All right.

Great. Thank you.

Good afternoon, and welcome to Fractyl Health First Quarter 2026 Financial Results and Business Update Call. [Operator Instructions].

I'll now turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyl. Brian, 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.

Joining us on the call today are Dr. Harith Rajagopalan, Chief Executive Officer; and Lara Smith Weber, Chief Financial Officer.

During this call, we make forward-looking statements, which involve risks and uncertainties that may cause our actual results to differ materially from those expressed or implied by forward-looking statements. A discussion of these risks and uncertainties is included in our filings with the SEC from time to time, including the section titled Risk Factors in our annual report on Form 10-K for the year ended December 31, 2025, and our quarterly report on Form 10-Q filed today, which I encourage you to review.

Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements, even if subsequent events cause our views to change.

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

Thank you, Brian. Good afternoon, everyone. Tens of millions of Americans are now on GLP-1 therapy and over 1 million people are discontinuing GLP-1s each month in the United States. What happens next is increasingly well characterized, regain of roughly 10% of total body weight in the first 6 months and 15% total body weight by 12 months. Every one of those patients stopping a GLP-1 faces a moment with no durable off-ramp, no alternative to either resuming chronic pharmacotherapy or accepting the risk of the return of the weight they worked so hard to lose. The more weight loss on GLP-1s, the greater the risk of rapid weight and metabolic rebound upon discontinuation.

Revita is being built for that moment. On our Q4 earnings call in March, we made 4 commitments to this audience. First, we said that the signal is real, and we understand with greater clarity how Revita works and in whom it works best. Second, we said that the pivotal trial is fully randomized, built to succeed and executing on plan. Third, we said the path from clinical data to commercial value is clear and that we are actively building it. And fourth, we said that we have the financial runway to reach pivotal data without a planned capital raise and that we intend to hold that line.

Q1 2026 was a quarter of execution and today, I want to reaffirm these 4 commitments and give you a clear accounting on each of them. Let me take them each in turn. First, the clinical signal is real, the medical community sees it and appreciate its potential. In March, we shared 2 findings from our REMAIN-1 midpoint cohort study that formed a clinical foundation for the pivotal study, a larger treatment effect in participants with higher run-in GLP-1 induced weight loss and a statistically significant dose-dependent treatment effect tied to duodenal ablation length, the right dose in the right patients.

In early May, we presented the REMAIN-1 midpoint cohort 6-month data at Digestive Disease Week, or DDW, which is the largest international meeting in gastroenterologists, hepatology and endoscopy. DDW was jointly sponsored by 4 major medical societies and showcases more than 6,000 abstracts on the latest advances in GI research medicine and technology. Ahead of this year's meeting, the DDW program committee selected the REMAIN-1 midpoint cohort for its Press Program, 1 of only 4 studies featured from those 6,000-plus accepted abstracts. This was the first time the dose response analysis and patient selection findings were presented in a peer-reviewed setting to a broad and expert clinical audience. During the meeting, we convened in a clinical advisory board with leading gastroneurologists and metabolic medicine physicians from across the country, and the discussions confirmed their alignment on the mechanism, the procedural rationale and our pivotal study design.

Beyond the science, these are the clinicians who, in our view, are best positioned to lead a center of excellence model in bariatric and metabolic endoscopy, pending potential FDA approval of Revita. We already have a strong network of champion physicians who have been part of our clinical trial program over the years, and we are cultivating even more relationships now in parallel with the pivotal study. The enthusiasm among the physician community for a new therapeutic option in metabolic endoscopy and in particular, for a solution for post GLP-1 rebound is real, palpable and growing.

When management tells you the clinical signal is real, that is our conviction. When the clinical community, the world's largest GI meeting chooses your study for more than 6,000 abstracts as one of the 4 most newsworthy and engages with the data on its scientific merits, that is external validation. And when we begin lining up the clinical leaders who would deliver this therapy if and when it reaches the market, that is preparation. We have all 3: Conviction, scientific validation and clinical champions.

Point number two, the pivotal is executing on plan. Not only does the clinical community appreciate that the Revita clinical signal is real and growing, the REMAIN-1 pivotal cohort completed randomizations in February with more than 300 participants across more than 30 sites across the United States. It's the largest sham-controlled GI endoscopy pivotal trial ever conducted. Every operational metric that predicts pivotal success continues to track favorably.

Let's turn to the analytical framework for the pivotal cohort. We have 2 prespecified co-primary endpoints. The first measures the percent total body weight regain at 6 months in Revita participants versus sham after the discontinuation of tirzepatide. This is the endpoint that anchors our early Q4 readout.

As I noted earlier, the published trajectory in patients with discontinued GLP-1 therapy is to expect roughly 10% total body weight regain by 6 months. Against that benchmark, a meaningful, statistically significant reduction in regain in the Revita arm versus sham, particularly in patients, participants with longer ablation lengths or higher run-in weight loss is what we believe a successful readout looks like.

The second co-primary endpoint is a responder rate at 52 weeks defined as a percentage of Revita treated participants who maintain at least 5% total body weight loss from pre-tirzepatide levels through 1 year. Together, these endpoints test both the magnitude and the durability of the Revita treatment effect. Alongside the co-primaries, we will also evaluate the high run-in weight loss patient selection and dose response as key secondary end points that emerged from the midpoint cohort data analysis. Participant retention in the pivotal study continues to exceed well over 90%. Medication resumption rates remain below our modeled assumptions. The blinded adverse event profile remains consistently reassuring and in line with what we have seen in our prior studies. The study is running as planned. We remain on track as well to deliver top line 6-month primary endpoint data in early Q4 2026. The countdown to last patient 6-month visit in Q3 is clear and well defined.

On regulatory progress, we previously reported in March, favorable FDA feedback on our de novo classification request, confirming our review that Revita's safety profile is consistent with a moderate risk rather than a high-risk device classification. I'm pleased to reaffirm that we are on track for FDA submission in late Q4 2026 with our 6-month pivotal data in hand.

Number three, we are actively building the commercial path. The underlying commercial opportunity has only continued to accelerate since we last spoke to you. In early April, FDA approved Foundayo, the first once-daily oral GLP-1 for chronic weight management. This is a meaningful development in its own right and a concrete accelerator of the population that will eventually face post GLP-1 weight regain.

And while the advent of oral GLP-1s provides more options for patients, early data suggests that patients are not titrating their oral GLP-1s or refilling them at the expected rates, indicating that the need for a durable alternative will likely still be very large even though the number of GLP-1 initiators only continues to grow. These market dynamics are favorable for Revita's position in the market.

On the payer side, public programs are moving to expand low-cost access to GLP-1 therapies for Medicare and Medicaid beneficiaries. The specific policy mechanics for GLP-1 coverage are still being worked out, but the underlying direction is unmistakable. Seniors, a population with among the highest obesity prevalence and among the highest risk of GLP-1 discontinuation, will have meaningfully expanded access to these therapies over the next 18 months.

And that matters for Revita for a simple reason. Every additional patient who starts a GLP-1 is another patient who will eventually face the question of what to do when that drug is discontinued. As public payers take on more of the cost of chronic GLP-1 therapy, the economic case for a durable, well-timed alternative gets sharper. Remember, approximately 1 million patients per month are discontinuing GLP-1s and needing a safe and effective off-ramp.

The problem of post GLP-1 rebound turns a chronic heterogeneous disease like obesity into an acute problem that mandates an acute solution. Today, the only options are to continue chronic pharmacotherapy or accept the risk of rebound, Revita is being built to be the third answer at that moment of decision.

One additional development from the past few weeks deserves special mention as well. In late April, CMS and FDA jointly announced the RAPID coverage pathway designed to align Medicare national coverage with FDA market authorization for eligible breakthrough devices. Under RAPID, CMS issued a proposed national coverage determination on the same day of device received FDA authorization with full national coverage and payment potentially in place within approximately 2 months.

We believe Revita may be well positioned to benefit from this pathway. Revita holds FDA breakthrough device designation in both weight maintenance after GLP-1 discontinuation and type 2 diabetes. Our REMAIN-1 pivotal study is an FDA-approved IDE trial measuring clinically meaningful outcomes that we believe are relevant to both FDA review and Medicare coverage. And we have a track record of CMS collaboration. Our prior Revita IDE studies in type 2 diabetes received Medicare coverage of routine costs and study-related expenses. RAPID builds on that foundation. The pathway is still early in implementation, and we are continuing to work through the specifics with our reimbursement experts, but our initial read is that RAPID materially derisks and potentially accelerates the commercialization reimbursement time line for Revita should we reach the market.

Beyond RAPID, our broader reimbursement infrastructure continues to advance on schedule. We remain on track to file a Category III CPT code application this summer with a code that would be expected to be effective in the summer of 2027. Transitional pass-through payment from CMS continues to provide a clear, positive pathway to a favorable contribution margin for hospitals should Revita reach the market. And one lesson we are learning from physicians at DDW is that this transitional pass-through payment mechanism has been successfully used in GI endoscopy by centers across the country presenting a compelling option for Revita Centers of Excellence to be able to secure payment soon after launch. And to our knowledge, Revita remains the only potential procedural therapy in development for post GLP-1 weight maintenance. Certainly, it's the only potential post GLP-1 weight maintenance option with pivotal trial data expected within 6 months.

Turning briefly to Rejuva, our smart GLP-1 gene therapy platform targeting long-term metabolic remission from a single dose. We recently received authorization from EU regulatory authorities in the Netherlands to initiate the Phase I/II first-in-human study of the RJVA-001 drug candidate, the first clinical candidate from our Rejuva platform. With this authorization, we believe RJVA-001 is a first AAV-based gene therapy candidate to enter clinical development for type 2 diabetes, and Fractyl now advances Rejuva to a clinical stage just as Revita is potentially poised to exit clinical stage and graduate to commercial stage over the coming quarters.

RJVA-001 is a onetime beta-cell targeted gene therapy designed to enable nutrient-responsive physiologic GLP-1 expression within the pancreas potentially avoiding the high circulating drug levels that contribute to side effects seen with systemic GLP-1 therapy. The therapy is delivered by a minimally invasive endoscopic ultrasound guided infusion directly into the pancreas, and this authorization reflects years of rigorous translational work, deep engagement with regulators and a disciplined tissue-targeted approach to local AAV gene therapy that we believe differentiates RJVA-001.

We also plan to conduct the study at other sites in Europe and in Australia, where a clinical trial application has also been submitted. Regulatory feedback for Australia is expected in the third quarter of this year. Pending site activation, we expect to dose the first patient with RJVA-001 and report preliminary data in the second half of 2026.

As a deliberate part of our capital allocation strategy, Rejuva clinical development is funded within our existing cash runway into early 2027, beyond the anticipated REMAIN-1 pivotal data readout, and there is no change to our capital plans.

So before I turn to Lara, I want to spend a moment on what the next several months look like. 3 of Revita data readouts lie ahead between now and year-end. The first 2 will provide specific incremental signals about what the pivotal cohort is likely to show and the third is a pivotal data itself. Before I walk through each, let me be specific about what a good result looks like because we get that question often.

The published literature predicts that patients who have lost approximately 20% total body weight on GLP-1 and then stop that medicine, regain approximately 15% of their total body weight within a year. Against that benchmark, we would view roughly a 50% reduction in weight regain or 7.5% or less as a strong 12-month result in these studies for patients, clinicians, regulators, payers and investors alike.

And based on the dose response and patient selection findings we have already described, we would expect the signal to be even stronger in participants with higher run-in weight loss and longer ablation lengths. The pilot sham control data provides visibility into the right dose in the right patients and the upcoming clinical milestones offer the opportunity to bear that thesis out.

Investors have also asked whether we intend to present these upcoming data sets through the same dose response and run-in weight loss lenses we used at Q4 earnings. The answer is yes. The biology has not changed and neither has our view of how to interpret the data.

In Q2, we will see 1-year data from the REVEAL-1 cohort, our open-label study. REVEAL-1 enrolled a population with broadly varied run-in GLP-1 exposure and a significant weight loss. Representative of the variation we would expect to see in a real-world GLP-1 discontinuer population. 12-month data from this cohort is our first look at how durable the Revita treatment effect is after a full year of GLP-1 therapy. It will not, on its own, settle the durability question, but it is a critical important first read on the shape of the curve. Remember that REVEAL-1 patients lost more than 20% total body weight on GLP-1 over more than a year on medicine and we would expect a regain of about 15% at 1 year and those who discontinue. We look forward to seeing what the data from REVEAL-1 cohort teach us.

The second major data catalyst is in Q3, 12-month randomized sham-controlled data from the REMAIN-1 midpoint cohort. This is the same cohort in which we shared our 6-month randomized data now with 6 additional months of follow-up under a blinded, randomized, sham-controlled design. At 6 months, we observed a compounding monotonically increasing separation between Revita and sham in the optimized patient population. If that trajectory continues, 12-month randomized data will potentially show a durable treatment effect in the same cohort over a period of time that regulatory guidance equates to durability of therapeutic effect.

The third major data catalyst is a pivotal itself with top line 6-month data expected in early Q4. By the time this readout arrives, investors will have seen 2 prior data points through 12 months that provide the opportunity to build conviction leading into the definitive pivotal readout. We believe this is a potentially rich and systematic catalyst setup up into the year-end and potential regulatory filing. With 12-month data from the REVEAL-1 and the midpoint cohort and top line 6-month data from the pivotal cohort, the entire clinical profile for Revita in post GLP-1 weight maintenance has the potential to be substantially clarified and defined by Q4 of this year.

Layer on top of this, the clinical profile -- layer on top of this clinical profile, the favorable feedback we've already received on our device classification, the breakthrough device designation in GLP-1 weight maintenance, the streamlined reimbursement pathway just announced by CMS and and the vocal support of clinical champions in GI endoscopy, and we believe we are set up for an exciting upcoming set of quarters.

Catalyst summary. In Q2, the DDW presentations are now complete. RJVA-001 CTA regulatory feedback has been received, and we will soon see REVEAL-1 12-month open-label data. Q3 REMAIN-1 midpoint cohort 12-month randomized sham-controlled data. Early Q4, top line 6-month randomized data from the REMAIN-1 pivotal cohort and late Q4 potential de novo marketing application submission for Revita in post GLP-1 weight maintenance. In parallel, in H2, we expect to see first-in-human dosing of RJVA-001 and reporting of preliminary data subject to FirstSight activation for Rejuva. Lara?

Thank you, Harith. Research and development expenses were $15.6 million for Q1 2026 compared to $19.4 million for the same period in 2025. The decrease was primarily related to reduced spending on our Revita and Rejuva programs as well as lower personnel-related expenses.

SG&A were stable coming in at $5.2 million for Q1 2026 compared to $5.3 million for the same period in 2025. We reported net income of $9.2 million for Q1 2026 compared to a net loss of $23.7 million for the same period in 2025. The shift was driven by a $30.1 million noncash accounting change in the fair value of our warrant liabilities which does not reflect a change in our underlying operating performance. Our total operating expenses for Q1 2026 were $3.9 million lower than the same period in 2025. Adjusted EBITDA was negative $18 million for Q1 2026 compared with negative $23 million in Q1 of 2025. The decrease was primarily due to a decrease in operating expenses.

As of March 31, 2026, we had approximately $63.2 million in cash and cash equivalents. Q1 spend included certain one-off costs, primarily associated with completing REMAIN-1 pivotal cohort randomization and is not representative of our expected run rate for the remainder of the year. Based on current business plans, the cash position is expected to fund operations into early 2027, beyond anticipated REMAIN-1 pivotal data readout in early Q4 2026 and through a potential de novo submission in late Q4 2026.

With that, I'll turn it back to Harith.

Thank you, Lara. Before we open Q&A, I want to reaffirm our capital posture without ambiguity. Our ATM facility remains closed. We do not plan to raise capital before we have pivotal data in hand. Our runway extends into early 2027. This posture is a deliberate choice, grounded in conviction. We believe the pivotal data will be successful, and we are operating within our existing capital envelope as a signal of management's alignment with shareholders through the most consequential 6 months in this company's history.

I want to acknowledge the patients in our pivotal study who trust us with their health and their commitment. The investigators and operators who have executed the trial with skill and rigor, our employees whose focused through a demanding stretch of clinical and operational work has been exceptional, and our shareholders whose conviction in the science makes everything we are building possible.

Operator, we're ready to take questions.

[Operator Instructions]. And our first question comes from the line of Whitney Ijem of Canaccord Genuity.

This is Angela on for Whitney. Maybe a question to start on Rejuva. Can you just walk us through how you're thinking about enrollment time lines, the target product profile. And then what should we expect to see from the preliminary data set in the second half of the year?

Sure. So subject to site activation, there is a several-week run-in period for first patients. Just remember, this is a 3x3 study design. So first patients will be treated at an initial dose. We'll evaluate safety, feasibility and initial PK/PD from those 3 individuals before we consider escalating to the next dosing regime. And what you would expect is that we will -- that each patient will be treated and then there will be a short period of time in between each individual patient is dosed within each cohort.

The initial thing that we're obviously looking for and the clear early signal pertains to the safety and the feasibility of the delivery. And that is an answer that we should be able to see within the first 1 to 2 weeks of patients being dosed. But we don't expect to really see preliminary PK and PD signals until roughly 8 weeks afterwards. When the GLP-1 level expression levels should be reaching their target levels. And then the effect on glucose and insulin related physiology will be discernible. And so we'll give you an update after those first patients are enrolled on both initial safety and feasibility, and then you'll get a sense for what we expect to see from an efficacy standpoint.

And our next question comes from the line of Umer Raffat of Evercore.

This is Mike DiFiore in for Umer. Congrats on all the progress. A few quick ones from me. First one regarding de novo submission rate. My question is, is an all-comer pivotal success required for de novo submission? Or could a dose response or subgroup data influence the regulatory package there. Separately, any updates in the German commercial use? Any insights gained from that? I know it's kind of been a while since that's been going on. And last question is -- yes, I'll just leave it there.

Sure. So the de novo pathway has a different clinical threshold than a PMA. Though, I think we are -- we feel like we are highly confident in the pivotal trial success under any metric, and I don't think that we have anything to worry about there. de novo, because it's deemed moderate risk, and because the FDA thinks about benefit risk ratio, the de novo seeks a reasonable assurance of safety and effectiveness which is often translated to interpret the totality of clinical evidence rather than any one single p-value.

And so I do think that there is flexibility there. I don't think we're going to need it. With respect to German commercial use, we are continuing to follow patients -- and we are -- and we have patients who are, as you know, we reported 2-year data last year, continuing to follow up to 5 years. And so we will have an update for you in the coming quarters once a reasonable number of patients have hit 3 years, which hasn't quite happened yet. That's the next major update to come. And we're not giving guidance on exactly when that will be, but you can reasonably expect it to be coming in the coming quarters.

Yes, we're excited about what that can show about the durability of effect, obviously, and round out the clinical picture of what the real world use looks like for Revita.

Our next question comes from the line of Jason Gerberry of Bank of America Securities.

This is Chi on for Jason. Maybe just piggyback on the de novo marketing application submission. Would you expect to file to include a 1-year REVEAL-1 cohort data and the 1-year REMAIN-1 midpoint cohort data in the submission package? And to what extent those 1-year data while not in the pivotal cohort, to what extent those 1-year data can support the totality of the data in terms of the de novo marketing application?

We'll be submitting all of the data to the FDA and totality of data means totality of data. So we've been working on Revita and establishing the science now for the better part of a decade. We have hundreds of patients that we've treated across a range of different clinical venues, clinical trial sites and patient populations. We do intend to file on the REVEAL-1 data on the REMAIN-1 midpoint cohort data in order to contribute to the totality of that evidence.

And I believe that the FDA, based on prior experience with de novo will consider the totality of available evidence when making their marketing authorization decision in the de novo pathway. And I think that, that provides us all of the reassurance and confidence that we are well on our way. The pivotal trial is built to succeed. We have a favorable feedback from the FDA. I think all signs are pointing green for us.

Our next question comes from the line of Mike Ulz of Morgan Stanley.

Maybe just a follow-up on the RJVA-001 study that you're getting underway here. Can you just comment on the first dose cohort? Should we think about that as an active dose? Or is the way to think about it is maybe you started with a lower dose to kind of check the box on safety before you start increasing the dose?

Yes, statutory requirement here is that the first dose should be an active dose and patients should be able to benefit from it. That's absolutely our intent with the first dose. This is a first time of performing this route of administration for this disease. And so we are obviously going to want to ensure that we are cautious in our approach and putting patient safety first, but we are optimistic in being able to see active signals, once enough time has transpired after the administration.

Our next question comes from the line of Jeffrey Cohen of Ladenburg Thalmann & Co.

Firstly, could you talk about DDW a little bit in your advisory board and maybe give us a sense of some of the questions, curiosities, pushback, feedback, et cetera, that you received from physicians and clinicians.

I love DDW. It's a great meeting for us. The physicians who attend are leaders in GI endoscopy. Many of them are building practices around metabolic and bariatric endoscopy and our leaders in the society as well as in clinical practice around the country. We have been sharing our REMAIN pivotal midpoint cohort data, our REVEAL open-label data. We've been walking through our pivotal study and our commercialization plans and have gotten incredibly positive feedback from folks all over the United States from L.A. to New Hampshire from Seattle, Washington to Miami, Florida.

One benefit we have is that the clinical infrastructure that we built to run our pivotal studies, the physician relationships that we've established, the training that we've done all represent the baseline sort of commercial distribution infrastructure with champions who are familiar with the technology, who have enrolled the patients in the study, who have seen how they have done with their own eyes. Their enthusiasm gives us the fuel and fire to continue to proceed in a way that is as optimistic as we are.

And then as a follow-up, could you maybe talk about any net material adds or changes to the IP portfolio in the past quarter, including both potentially Rejuva as well. Thank you.

We continue to strengthen our IP portfolio. We had in Q1 adds to the strength and breadth of our Revita portfolio, and we've been continuing to focus Rejuva on establishing a strong IP landscape around the device around the procedure and how the device and procedure and the gene therapy product and how they all work together to ensure what we believe will be a safe and feasible administration of the gene therapy. So I don't know if any new patents were issued in the first quarter off the top of my head, but I'm going to find out, and I will get you that answer but we do have a very strong and robust portfolio across both Revita and Rejuva.

[Operator Instructions]. Our next question comes from the line of Joe Pantginis of H.C. Wainwright.

Hello, everyone. This is [ Lambert ] on for Joe. So for Rejuva, when should we expect regulatory feedback from additional European countries for the Phase I/II trial. And also, can you provide some color on past, current or future interactions with the FDA for the progress of Rejuva in the U.S.

Well, we have all of the feedback we need in order to initiate the RJVA-001 study in Europe, and I think that's the most important point. We chose Netherlands because there is an excellent very highly regarded internationally recognized GI endoscopist who does clinical research in the area at an Amsterdam University Medical Center, where we anticipate our first patients in Europe being treated or being enrolled is -- has a track record of conducting high-quality gene therapy study. Our next guidance for you is that we expect Australian -- or feedback from regulatory authorities in Australia in Q3. So that's what I would look to next.

With respect to the FDA, while we've had positive repetitive interactions with the regulators in Europe, we have not yet approached the FDA on this topic. And I don't have a guidance for you yet on when we will, but our plan is to secure early safety feasibility data in this first-in-human study before discussing with the FDA.

Awesome. Very helpful. Thank you so much.

I'd now like to turn the call back to Dr. Rajagopalan for closing remarks.

Well, thank you, everyone. We are executing. The science is working. We have 3 major clinical catalysts from REMAIN-1 program coming in the next 6 months with pivotal top line data in early Q4. Thank you for the call.

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

Good afternoon, and welcome to Fractyl Health Fourth Quarter and Full Year 2025 Financial Results and Business Update Call. [Operator Instructions].

I'll now turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyle. Brian, you may now begin.

Thank you. This afternoon, we issued a press release that outlines the topics we plan to discuss today. The release is available at www.fractyl.com under the Investors tab. Joining us on the call today are Dr. Hartih Rajagopalan, Chief Executive Officer; and Lara Smith Weber, Chief Financial Officer.

During this call, we make forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, including the annual report on Form 10-K filed today, which I encourage you to review.

Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements, even if subsequent events cause the company's views to change.

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

Thank you, Brian, and good afternoon, everyone. Millions of Americans are starting GLP-1 therapy. Most of them will stop within a year. Data show that when they stop, the weight comes back, approximately 10% of their body weight within 6 months and approximately 15% within 12 months.

Every one of those patients faces a moment with no durable off-ramp, no alternative to either resuming chronic pharmacotherapy or accepting the risk of regain. Revita is being built for that moment.

For those of you who are new to the Fractyl story, Revita is our lead asset. It's like LASIK for obesity, an endoscopic procedure designed to durably maintain weight loss after GLP-1 discontinuation. And Rejuva is our smart GLP-1 platform targeting long-term metabolic remission from a single dose.

Today, I want to tell you where we stand in the development of Revita for post- GLP-1 weight maintenance, what we have learned since we last spoke to you about the clinical data and share new favorable feedback we have received from the FDA on our filing strategy.

I'd like to start by naming something directly. In January, we reported 6-month data from the REMAIN-1 Midpoint cohort. The past several weeks of analysis have given us a level of precision about which patients benefit most from Revita and at what procedural profile that we did not have before. This clarity has strengthened our conviction in Revita and has helped us finalize the pivotal study's key design elements to ensure we are set up for regulatory and commercial success.

Today, we will share what we now know and why the picture is both more precise and more compelling than the headline p-value initially suggested. Let me walk you through 4 key pillars that give us conviction in the opportunity in front of us. Number one, the clinical signal is real. Number two, the pivotal is built to succeed. Number three, the path from data to commercial value is clearer than ever. And four, we have the runway to get to the definitive pivotal data without any planned incremental capital raise.

Now let's start by discussing the clinical signal. You will recall that the Midpoint Cohort was a pilot randomized, double-blind, sham-controlled study that enrolled 45 patients with obesity who were GLP-1 naive. They were started on tirzepatide to achieve at least 15% total body weight loss and then randomized 2:1 to Revita versus sham. This 45-patient study was designed as an interim read to validate the design and the powering assumptions for the REMAIN-1 pivotal study, not as a powered stand-alone efficacy study.

Nonetheless, the 6-month Midpoint Cohort data did not look as strong as the 3-month data. Early analysis that we shared at the time of data release was that site level heterogeneity appeared to account for the attenuation of the clinical signal in some patients. Further investigation has revealed that the site level heterogeneity is, in fact, differences in ablation length or treatment dose at early clinical sites and that these differences in ablation length are a key driver of efficacy differences between patients.

Critically, we have not identified site level operational issues. What we did find was even better, a strong dose response relationship between ablation length and weight maintenance after GLP-1 discontinuation. This is a strong positive signal for the Revita mechanism of action and for the potential success of the pivotal study.

We have long understood from our work in type 2 diabetes that Revita's treatment effect is proportional to the extent of duodenal resurfacing. Our first-in-human feasibility and dose escalation pilot study in type 2 diabetes was published in Diabetes Care in 2016 and prospectively demonstrated a clear relationship between ablation length and glucose lowering. Since that time, we have been systematically optimizing the procedure profile across successive clinical studies to deliver longer ablation length from 9 centimeters in the first in human to over 16 centimeters on average in REMAIN, and have seen greater potency in our studies without compromising patient safety.

And because of this experience, our pivotal study already prespecified an ablation length dose response secondary endpoint. When we applied this dose response analysis to the Midpoint Cohort 45 patients, we observed a statistically significant p less than 0.05 monotonic and clear relationship between ablation length and weight maintenance treatment effect at 6 months.

Participants who received more than 14 centimeters of ablation regained approximately half the weight of sham, whereas those individuals with subthreshold ablations accounted for the apparent narrowing of treatment effect between month 3 and month 6 that we saw in our January data release. This finding is consistent with our prior evaluation of ablation length on patients with type 2 diabetes, and it makes sense biologically. The duodenum is lined with enteroendocrine cells that drive key metabolic signaling pathways. The density of that cell population is distributed along the length of the duodenal mucosa and duodenal dysfunction from high fat high sugar diet extends along the length of the entire duodenum in animal models.

A longer ablation resurfaces a greater proportion of that signaling surface, producing a more complete metabolic effect, which is exactly what our dose response data confirmed. In the REMAIN-1 pivotal study, we trained physicians to ablate from the ampulla of Vater to the ligament of Treitz, which are anatomical landmarks toward the beginning and the end of the duodenum, respectively.

Based on our work in type 2 diabetes, we aim for an ablation of at least 10 centimeters, but encourage physicians to ablate more if they deemed it appropriate. In the pivotal study, the mean and median ablation length are more than 16 centimeters, providing ample opportunity to demonstrate an enhanced clinical signal reflecting more complete duodenal ablation.

Notably, all pivotal investigators were successfully trained to achieve more than 14 centimeters of ablation, confirming procedural scalability and feasibility across diverse operators and patient anatomies.

So taking a step back, what we have is a clear monotonic dose response, which is exactly what you would expect to see from a true biological intervention. All drugs and all procedural therapies that work like drugs should show a dose response relationship. That's what biological activity looks like. And ablation dose is a specific, measurable, controllable and standardizable metric for repeatable outcomes in a broad population.

So having established ablation length as a key procedural driver of Revita's potency, let's turn to patient selection. The scientific community has long understood that the magnitude of initial weight loss on GLP-1s is proportional to the magnitude and speed of weight regain upon discontinuation. So we designed REMAIN-1 with a greater than 15% total body weight loss threshold at run-in, specifically because we expect the treatment effect to scale with the degree of pre-randomization weight loss.

Midpoint Cohort results at 6 months confirm this relationship. Participants with greater than 17.5% weight loss showed an early, sustained and compounding separation from sham through 6 months. The pivotal has enrolled a population that is built to capture a large effect size that scales to the magnitude of initial weight loss as well with a mean run-in weight loss of 18.3% in the Pivotal Cohort.

So when we now consider the right dose in the right patient, we observed the signal to be strongest among participants with higher weight loss who received longer length of duodenal ablation. And in these individuals, Revita-treated patients experienced only 2.9% weight regain at 6 months compared to 9.9% in the sham arm, approximately a 70% reduction in post GLP-1 weight regain. Like ablation length, the treatment effect scale monotonically with the magnitude of weight loss as well.

Another way to think about it is that in this optimized patient cohort in the midpoint study, patients retained about 88% of their body weight loss on tirzepatide compared to only about 60% in the sham arm at 6 months. We believe this degree of weight loss maintenance will be highly compelling to key commercial stakeholders. It is a prospectively definable, commercially significant population. It is the exact population that the pivotal study has enrolled and will enable efficacy endpoints in our pivotal study later this year.

This is also classic translational pharmacology applied to a procedural therapy, identification of the right patients and the right dose to optimize the clinical profile and achieve a large treatment effect.

Turning now to the pivotal study statistical analysis plan and operational progress. Our plan was always to analyze the 6-month Midpoint Cohort to inform our understanding of the key drivers of effect size and then to use this information to prespecify the Pivotal Cohort statistical plan.

The pivotal SAP, which we will file with FDA shortly, incorporates these parameters as prespecified analyses, and this will enable clarity on effect size and durability as a function of treatment dose and patient selection in the pivotal study.

I also want to provide clarity about our endpoint structure. REMAIN-1 has 2 co-primary endpoints. The first is percent body weight regain in the Revita arm versus sham at 6 months. This is the data we expect in early Q4. The second co-primary is the proportion of Revita-treated patients who maintain at least 5% total body weight loss at 1 year after GLP-1 discontinuation. Both co-primaries are required to be met at p less than 0.05 for overall study success and we believe the pivotal is well powered at over 90% to achieve that result even under conservative assumptions.

In addition to these co-primaries, we will present a comprehensive set of secondary endpoints, including a dose response analysis, a high responder population analysis, cardiometabolic markers and patient-reported outcomes, including reduction in cravings for sugary foods.

In February, we completed randomization in the full study of the Pivotal Cohort with over 300 participants across more than 30 sites and over 20 operators across the United States, making this the largest sham-controlled GI endoscopy pivotal trial ever conducted. Every operational metric that predicts pivotal success is tracking favorably.

Retention exceeds 95%. Medication resumption rates are below our model assumptions. The blinded adverse event profile remains encouragingly consistent with what we have seen in prior studies. And we remain on track to deliver top line 6-month primary endpoint data in early Q4 2026.

Turning now to regulatory progress. Earlier this month, we received favorable FDA feedback on our De Novo classification request. You may remember that we aim to get that feedback in Q2, but our most recent discussion with FDA revealed that they have reviewed safety data to date, and they acknowledge that Revita's safety profile is consistent with a Class II device classification or a moderate-risk De Novo device.

With this positive feedback now in hand, ahead of schedule, we are on track for De Novo submission in late Q4 2026 with 6-month pivotal data in hand. There are several advantages to the De Novo pathway compared to the PMA pathway. It is a more capital efficient, faster and strategically superior path.

So now let's turn to the commercial opportunity because the landscape is evolving in ways that reinforce the urgency of what we are building and the path from clinical data to commercial value is becoming clearer and nearer than ever. With an anticipated filing via the De Novo pathway at the end of this year, we're also preparing ourselves for our potential commercial launch.

There is a large and growing population on GLP-1 drugs with estimates projecting over 30 million users in the next several years. We estimate that as newer agents become more effective, more than 50% of patients are expected to lose more than 17.5% of their total body weight on GLP-1s and more than half of these are likely to discontinue.

As a result, the post-GLP-1 unmet need is intensifying rather than abating. A large study published in BMJ Medicine last week following over 330,000 patients showed that GLP-1 cardiovascular benefits erode rapidly after discontinuation with the authors coining the term metabolic whiplash. Resuming treatment did not fully restore lost benefits, underscoring the need for durable maintenance solutions.

Meanwhile, the payer landscape is shifting. CMS has expanded Medicare coverage of GLP-1s, driving a massive increase in the addressable patient population, but also intensifying the economic pressure on payers who are now grappling with the long-term cost of chronic therapy. This creates an unprecedented window for Revita, the first FDA breakthrough device designed for post-GLP-1 weight maintenance as a potentially durable, cost-effective solution that gives people an off-ramp from chronic pharmacotherapy while preserving the metabolic benefits they work so hard to achieve.

On reimbursement, we now have a clear and validated pathway. We plan to file a Category III CPT code application this summer with a code expected to be effective in the summer of 2027. The payment economics work for hospitals from nearly day 1. Transitional pass-through payment by a CMS provides a separate incremental mechanism to cover the cost of the Revita disposable device on top of the facility rate, ensuring that hospitals can maintain a positive contribution margin while offering the procedure to patients.

Revita is the only potential procedural therapy in development for post-GLP-1 weight maintenance, and we believe the commercial infrastructure will be ready to move quickly upon clearance.

Briefly, let's turn to Rejuva, our smart GLP-1 platform targeting long-term metabolic remission from a single dose. We submitted clinical trial applications for RJVA-001 in type 2 diabetes to regulators in the EU and Australia, and we anticipate regulatory feedback in Q2 2026, expect reporting first-in-human dosing and preliminary data in the second half of this year.

The Rejuva program is advancing within a disciplined spending framework that does not compete with Revita for capital, and we will share more on the platform at an upcoming Investor Day.

Let me frame the anticipated catalyst-rich path ahead before I hand it to Lara. In Q2, we will see 1-year REVEAL-1 open-label data and receive CTA regulatory feedback on RJVA-001. In Q3, we will see 1-year REMAIN-1 Midpoint Cohort randomized data, and we expect to be able to demonstrate continued compounding treatment effect and durability at that time in a randomized data set.

In early Q4, we will anticipate seeing top line 6-month randomized data from the REMAIN-1 pivotal study. This is the single most important catalyst in our company's history. And in late Q4 this year, potential De Novo marketing application submission for Revita in post-GLP-1 weight maintenance.

In the second half of this year, we will also see human dosing of RJVA-001, subject to CTA authorization and preliminary safety and PK data. Each of these milestones move us closer to delivering the first potential procedural therapy for maintenance and weight loss after GLP-1 discontinuation, and it is a catalyst-rich year ahead.

Lara?

Thank you, Harith. Research and development expenses were $16.5 million for the quarter ended December 31, 2025, compared to $20.3 million for the same period in 2024. The decrease was primarily due to our strategic reprioritization in Q1 2025, resulting in lower personnel-related costs and reduced costs associated with the pausing of the REVITALIZE-1 study, partially offset by continued investment in REMAIN-1 and Rejuva.

SG&A expenses were $6.8 million for Q4 2025 compared to $4.9 million for the same period in 2024. The increase was primarily due to underwriters commissions associated with our August 2025 financing. We reported a net loss of $43.7 million for Q4 2025 compared to $25 million in Q4 2024. However, the $20.2 million of the increase was a noncash accounting change in the fair value of our warrant liabilities, which does not reflect a change in our underlying operating performance.

Stripping that out, our operating expenses for the quarter were $1.9 million lower than the same period in 2024. Adjusted EBITDA was negative $21.2 million for Q4 '25 compared to negative $22.1 million for Q4 2024, reflecting the decrease in operating expenses. As of December 31, 2025, we had approximately $81.5 million cash and cash equivalents.

Based on our current business plan, we believe this cash position, combined with the $4.1 million subsequent proceeds from warrant exercises received in January 2026 will fund operations into early 2027. Importantly, this funds the company beyond the anticipated REMAIN-1 pivotal data readout in early Q4 2026 and through a potential De Novo submission in late Q4 2026.

With that, I'll turn it back to Harith for one specific item on capital strategy and a few closing remarks before we open for Q&A.

Thank you, Lara. Before we open Q&A, I want to address capital strategy directly and remove any ambiguity. We have closed our ATM facility, and we do not have plans to raise capital before we have pivotal data in hand. Our runway extends into early 2027. This is a deliberate commitment grounded in conviction. We expect the pivotal data will be positive, and we will operate with discipline within our existing capital envelope as a signal of management's alignment with shareholders through a key moment.

A few final comments. First, we believe the clinical signal is real with a strong dose response and a clear GLP-1 responder target population. Second, the pivotal is built to win with strong powering on the full cohort and enrichment in an optimized cohort of patients with high running weight loss and longer ablation lengths. Third, we see a clear path to commercial value with favorable De Novo feedback and a large, defined and growing market opportunity. And lastly, we are funded to the key pivotal value inflection point without planned incremental capital raise between now and then.

We have the science, the runway and the team to prove it. We look forward to sharing more data this summer and into the fall. I want to express my deep gratitude to our employees whose dedication and focus through a challenging year has been nothing short of extraordinary, to the physicians and investigators who believe in the science and bring it to patients with skill and care to the patients who trust us with their health and their hope and to you, our shareholders, whose conviction fuels everything we do.

Operator, we are ready to take questions.

[Operator Instructions]. And our first question comes from the line of Whitney Ijem of Canaccord Genuity.

This is Angela on for Whitney. Can you guys just remind us how the ablation length is determined again, is that it's after the patient is already like during the procedure, right? And so yes, I guess like how is that length determined? And then it sounds like 16 centimeters is the cutoff now like going forward, is that the target minimum ablation length?

Yes. Great question, Angela. Happy to clarify this point because it's important to how we think about standardizing this procedure as we go forward and how we are going to analyze the pivotal data as well.

When we looked at the type 2 diabetes patient population, we saw a dose response where ablation was defined as the length of the total amount of duodenum that was ablated. When we did our first-in-human study, we saw that about 10 centimeters of ablation had more glucose lowering efficacy than 3 centimeters. We are seeing the same thing now in obesity, but at higher lengths of ablation. Our ablation balloon is 2 centimeters long.

In the procedure, we count the number of ablations that are performed longitudinally along the length of the duodenum, and that allows us to calculate the ablation length. What is clear is that the ablation length for weight effects is greater than or equal to 16 centimeters. That will be our operating standard going forward and will be built into the key secondary endpoints in our pivotal study. And in those patients, we see a clinically meaningful and compounding treatment effect in the Midpoint Cohort. We believe this to be the reason for heterogeneity that we saw back in January, and we're very gratified to have the data to be able to give us clarity on the precision of what is needed in order to deliver benefit to patients.

Great. Maybe just a quick follow-up. I guess, does this impact how doctors are going to be trained in the future in terms of length of ablation? And was it -- were they conducting less ablation because they were less comfortable with it? Or if you could just provide more color around that?

Well, in the pivotal study, we advise patients -- doctors to ablate at least 10 centimeters and from the anatomical landmark at the beginning of the duodenum towards the end of the duodenum. But it was less to the physician's discretion how much ablations to perform.

In that study, everyone was trained to be able to successfully perform greater than 14 centimeters of ablation across the board. And so we believe that we can easily train physicians to do that consistently now that we have the data to support that length being the efficacious dose.

Our next question comes from the line of Michael DiFiore of Evercore ISI.

One on the De Novo pathway. It seems that you're increasingly more confident that the FDA could accept your De Novo submission based on early feedback. And I guess my question is, to what extent does efficacy play in the final determination here? Or is it all about safety? And then I have a follow-up.

Well, I think the De Novo pathway determination versus, say, a PMA determination is principally a safety consideration because what the FDA is thinking about is whether this is a moderate risk device in De Novo versus a high-risk device in a PMA.

And then the efficacy threshold for PMA and De Novo are also nuanced -- have nuanced differences. The efficacy threshold for PMA is valid scientific evidence, whereas the efficacy threshold for a De Novo is reasonable assurance of safety and effectiveness.

I see. That's helpful. And then just back on the ablation length. I think I and a lot of other folks were under the impression that this was already standardized. But now you made it clear that in the pivotal studies, physicians were instructed to ablate at least 10 centimeters. And I guess my question is in the real world, based on the average patient, is 16 centimeters readily achievable? Or is the average patient's anatomy more conducive to less centimeter ablations?

In the Pivotal Cohort, mean and median ablation length was greater than 16 centimeters and is readily achievable by all of the investigators that we've trained, and we believe that will be translatable to the broader population.

Our next question comes from the line of Jason Gerberry of Bank of America Securities.

This is Chi on for Jason. Maybe a follow-up on the ablation length. Can you provide more color on the post-hoc analysis for the midpoint data set? More specifically, can you remind us the ablation length and GLP-1 induced weight loss from the Midpoint Cohort and how that compares to the metrics you provided for the Pivotal Cohort?

And secondarily, how much variability in the ablation length you saw in the Midpoint Cohort compared to the Pivotal Cohort? And I guess, ultimately, how does this post-hoc analysis impact your confidence for the pivotal readout later this year?

Well, this is a post-hoc analysis in the Midpoint Cohort. It was already a prespecified analysis in the pivotal study and is consistent with prespecified studies we've conducted on dose in type 2 diabetes in the past.

In the Midpoint Cohort -- sorry, in the Pivotal Cohort, mean and median ablation length are greater than 16 centimeters and the average ablation length is longer than it was in the Midpoint Cohort. And we feel confident that we can train physicians to perform longer ablations in the pivotal. All of this translates to a high degree of conviction in the pivotal study.

Number one, we are very well powered at well over 90% for the full cohort, and we have key secondary endpoints that we have prespecified that will interrogate patients who receive more than 16 centimeters of ablation and in patients who receive -- who have more running weight loss on the GLP-1. And we are confident that each of those independently and collectively will drive larger and compounding treatment effects in the pivotal study and will provide clarity on how Revita can be used in which patient and at what dose in order to achieve a clinically meaningful signal that can translate to commercial utilization.

Got it. So the ablation length for the Pivotal Cohort is what you have observed is longer than the ablation length in the Midpoint Cohort?

That's right.

Okay. And given you have already fully randomized the Pivotal Cohort, basically, is it fair to assume that all the ablation had already occurred and you're talking about ablation length you have observed for all the procedures that conducted?

Yes, that's locked. And I think we're saying that we're more than 1 month out from the last randomization now. And the safety signal in our blinded analysis continues to be very encouraging. And so we feel quite confident that the efficacy is the question in the pivotal study and the data that we're sharing with you today meaningfully increase the probability of success on the efficacy angle as well.

Our next question comes from line of Mike Ulz of Morgan Stanley.

And maybe just another one related to ablation. Just curious how long it takes to sort of train these physicians to be able to do the procedure to ensure adequate ablation. Is that something that's fairly quick? Or how much experience does it take to kind of make sure that they're hitting that mark?

This training that we've built is -- works very well. It takes less than 3 to 4 cases to train a physician to perform ablations. The shorter length of ablations that we sometimes see in the Midpoint Cohort and the Pivotal Cohort are often reflective of the first couple of cases that the physician is performing and yet very soon, they get very comfortable with it and then are consistently delivering longer ablations.

The huge advantage of a prospectively defined dose response in the pivotal is that it allows us to standardize the treatment -- the training regime and the treatment recommendation in commercial use. And I think that's going to help standardize real-world outcomes.

Our next question comes from the line of Jeffrey Cohen of Ladenburg Thalmann & Company.

Sorry to be redundant. So on the -- in Q3, when we see the 1-year remain Midpoint Cohort, will we see further analysis by length as far as the data that you're reading out?

Yes.

Got it. And then could you talk a little bit about the energy delivery and the temperatures involved? Has anything changed as far as the delivery from the generator between the Midpoint Cohort and the Pivotal?

No, nothing has changed. And I think one point that you should take confidence in is that even though we went from a small number of sites in the midpoint to a much larger number of sites and operators and patients, the treatment that we've been able to train physicians to perform has been remarkably consistent and standardized over the course of time.

The only difference that we are sharing with you now is that we can give specific guidance on what length of duodenum to aim for in obesity. And that is very useful information. We're glad to have it.

That's helpful. And then can you talk about the CPT code. So as I understand it, if you file during the midpoint somewhere in 2027 that, that could or would take effect January 1, '28. Are you also suggesting that it's possible that you'll have a T code that would take effect sometime in 2027?

We're anticipating filing for the Category III CPT code in June of this year. It's reviewed in September and should go into effect in the summer of '27, July 1. And we are also intending to file for a transitional pass-through payment through CMS immediately upon FDA authorization, and that's a quarterly review cycle. So that can go into effect very quickly upon launch. That's why we said that there was essentially no daylight between potential clearance authorization in the United States and reimbursement authorization for hospitals to begin to use it.

OOkay. And I'm assuming you'll also take on payer discussion late this year, commencing late this year as far as payer discussion?

That's right. And when you think about it, we will have a fully formed clinical profile by early Q4. 12-month randomized data from REMAIN-1, 12-month open-label data from REVEAL-1, 6-month randomized data from the full Pivotal Cohort of 300 patients. That's a fully derisked clinical package that we could then use to inform our payer discussions and drive towards our regulatory submission calendar.

Our next question comes from the line of Joe Pantginis of H.C. Wainwright.

So my first question is shorter, but maybe a more complex answer. So first, with the De Novo filing positive feedback, how would we view the totality of regulatory submissions over the next -- over the next year or so with regard to is it a multistep process? Or is it similar to a rolling BLA? Or how should we view it?

There are 3 main packages to the regulatory submission. There is a design history file, which is the device design. There's a manufacturing file, which reflects how we manufacture our systems. and then there will be clinical data. We will have a full package of 6-month data by the end of this year. There's -- we will also be ready to submit 12-month data in the first quarter of 2027, should that be necessary.

That's great. And then if I heard you correctly, correct me if I'm wrong, it sounded like you're going to be filing the SAP relatively soon. So with regard to the ablation length that we've been discussing today, and it's very intriguing data, by the way, how would you look at -- and you mentioned it's a prespecified population. How would that factor into the statistical analysis plan and also the role of the secondary endpoints that you mentioned and the hierarchy of them?

Great question. Obviously, details on the hierarchy are going to be pending our conversation with the FDA, and we'll share that with you when we have it.

I would make 2 points right now. Number one, the sweet spot of the enrollment and randomization of the pivotal study are exactly the patients in whom Revita appears to be working best. The mean ablation length was more than 16 centimeters, which is where Revita's efficacy is very clear based on the midpoint cohort. And the mean run-in weight loss was over 18% total body weight, which is where Revita's efficacy is also very clear.

So the right down the middle of the fairway of our pivotal enrollment is exactly the sweet spot of where we are seeing efficacy. And so we're confident in that. And we have designed key secondary endpoints in order to be able to demonstrate that very clearly.

Thank you. I'll now like to turn the call back to Dr. Rajagopalan for closing remarks.

Well, thank you, everyone. The science is working. The pivotal is on track and we look forward to delivering the definitive data this fall. Thank you all very much.

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

Greetings. Welcome to the Fractyl Health 6-month REMAIN-1 Midpoint Cohort. [Operator Instructions] Please note, this conference is being recorded.

I'll now turn the conference over to Lara Smith-Weber, Chief Financial Officer for Fractyl. Thank you. You may now begin.

Thank you. This morning, we issued a press release that outlines the topics we plan to discuss today. The release is available at www.fractyl.com under the Investors tab. Presenting today will be Dr. Harith Rajagopalan, Co-Founder and CEO of Fractyl  Health.

Before I begin, I'd like to remind you that during this call, we make forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, including the quarterly report Form 10-Q filed on November 12, 2025, which I encourage you to review. Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of these statements even if subsequent events cause the company's views to change.

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

Thank you, Lara. Good morning, everyone. Thank you for joining us. Today, we are thrilled to present prospective randomized, double-blind, controlled 6-month data from our REMAIN-1 Midpoint Cohort pilot study in which we showed that Revita continued to show weight maintenance 6 months after the discontinuation of GLP-1s. The data we're presenting today builds upon a set of evidence we have been generating over the past 2 years that together represent the beginning of what we believe is a new potential blockbuster therapeutic category in obesity, which is post GLP-1 weight maintenance, a field that Fractyl  is uniquely positioned to lead.

Today's results are the continuation of a period of momentum and acceleration with multiple clinical weight maintenance data readouts and regulatory milestones this year, culminating in top line pivotal data and potential FDA filing in the second half of this year. Today's data also extend and substantiate what we first demonstrated in September that Revita can meaningfully alter the trajectory of weight regain after GLP-1 discontinuation and they do so at a critical 6-month time point that aligns with the primary endpoint in our ongoing pivotal study.

Let's start with the key takeaways from the trial. The REMAIN-1 Midpoint Cohort data are a compelling success at 6 months, providing strong evidence of sustained weight maintenance with excellent safety and tolerability. While the entire efficacy cohort demonstrated weight maintenance, results were particularly pronounced in patients with greater GLP-1 associated run-in weight loss, those who are at highest risk of rapid weight rebound. These patients experienced a 70% reduction in post-GLP-1 weight regain with Revita versus sham. And importantly, these observations from the study reinforce our confidence in the design and execution of the ongoing pivotal study. Taken together, they provide substantial and compelling evidence to support the potential safety, efficacy and strategic positioning of Revita in post-GLP-1 weight maintenance.

Second, we are also thrilled to share that we've had a constructive and interactive dialogue with the FDA about Revita's favorable safety and tolerability. Given the output of these discussions, we requested FDA feedback on reclassifying Revita under the de novo classification pathway versus the PMA category in which it is currently classified. This is huge because the de novo pathway may enable a more efficient risk-based regulatory review process, and we expect FDA feedback on this request in Q2 2026.

Third, in light of our accelerating clinical and regulatory progress, we are advancing commercial readiness by turning our attention to reimbursement and commercial preparedness activities in the quarters ahead. Key enablers of this preparation include the predictable pathways conferred by both FDA breakthrough device designation and CMS transitional pass-through statutory time line and pathway. We are very excited about the anticipated catalysts ahead on the path to pivotal data, potential FDA submission and commercial preparation over the coming quarters.

We believe Revita can be viewed as a potential backbone therapy in obesity. And if it can succeed in this hardest-to-treat post- GLP-1 weight maintenance category, we believe it has potential across the spectrum of obesity and metabolic disease. For those who are new to the story, Revita is a onetime less than 1-hour outpatient endoscopic procedure designed to be like LASIK for obesity to address gut-level metabolic dysfunction. In prior clinical studies, we've seen up to 2 years of durable activity after a single treatment. Revita has breakthrough device designation from the FDA for post-GLP-1 weight maintenance and today's 6-month REMAIN-1 midpoint pilot data support the potential durability of effect and provides increased confidence in the ongoing pivotal study.

The REMAIN-1 midpoint cohort enrolled 45 adults with obesity and without type 2 diabetes who were GLP-1 naive, started on tirzepatide and titrated to achieve at least 15% total body weight loss. Once they hit 15% weight loss, tirzepatide was stopped and then these individuals were randomized 2:1 to Revita versus sham. In effect, we constructed a clinical study that allowed these people to become the world's hungriest humans and then randomize them to assess the effect of Revita versus sham. And the study was initially designed as a 3-month study, was not powered formally for hypothesis testing and the p-values we present today are provided to describe the strength and consistency of the treatment effects.

In the midpoint cohort of the 45 patients who were randomized, 29 were in the Revita arm versus 16 in the sham with 98% retention through 6 months across multiple sites. All 45 randomized subjects are included in the safety analysis and the efficacy analysis includes 40 participants who followed protocol-specified diet and exercise requirements through 6 months.

Let's start with the 6-month randomized top line data. What you see on Slide 8 is the average body weight change is 6 months after tirzepatide discontinuation in the midpoint cohort. In this full efficacy population, Revita-treated patients regained 4.5% of their body weight compared to 7.5% in the sham arm with a p value of 0.07 one sided. That represents a meaningful attenuation of post GLP-1 rebound with weight regain in the Revita arm coming in at less than half of what's typically expected following GLP-1 withdrawal. Importantly, approximately 30% of Revita-treated patients either maintained their weight loss or continue to lose weight through 6 months. And it's important to also remember that a p-value of 0.07 with an end of only 40 participants bodes very well for the pivotal study design with a sample size of 315 patients.

Now let's spend a moment talking about what we are seeing here. We do not believe when we look closely at the data that we are seeing a degradation of effect. Across all sites, the efficacy signal for Revita was robust compared to sham. At one site, we did observe an increase in weight in both the Revita and the sham arms, which we picked up through central statistical monitoring. This site is not contributing materially to the pivotal cohort, but it did contribute material to this pilot. Across all the other sites, the Revita effect remained remarkably stable and average weight regain in those -- in the Revita arm was less than 2.5%, which is very much in line with what we have already presented in December from the REVEAL-1 open-label cohort of 1.5% and in line with what we expect to see in the ongoing pivotal cohort. Remember, this is a small study with a small end, and we believe that what we are seeing is remarkably consistent across the study. We believe the pivotal study will be able to continue to demonstrate what we are expecting to see.

Now let's look a little bit deeper at the outcomes. Patients who lose the most weight on GLP-1 therapy are also those who are at highest risk of rapid and substantial weight regain once drugs are stopped. That has been shown consistently across GLP-1 withdrawal studies. And REMAIN-1 was intentionally designed around this reality. We randomized patients only after they achieved at least 15% total body weight loss on tirzepatide because that represents a population under the greatest biological pressure to regain weight. Remember, the world's hungriest humans. Consistent with that design, we conducted an analysis of the impact of GLP-1 run-in weight loss on efficacy outcomes, allowing us to understand how the treatment effect varies across the rate of regain -- the rate of run-in weight loss that people experience. And what you see on the right graph is striking.

In patients with above-average GLP-1-induced weight loss in the study, Revita reduced post GLP-1 weight regain by approximately 70% versus sham at 6 months with a p value of only 0.004. In absolute terms, sham patients in this subgroup had highest rates of weight regain, regaining about 13% of their body weight over 6 months, and Revita-treated patients regained only about 4%, representing a large and clinically meaningful separation at a highly relevant time point. We view this as a compelling biologically coherent enrichment signal, consistent with our understanding of Revita's mechanism of action and our understanding of those who are at greatest risk of post-GLP-1 weight rebound. And we believe the data show that Revita is having its greatest impact exactly where the unmet need is highest, reinforcing both the therapeutic rationale and our confidence in the ongoing pivotal study.

The effect of Revita on other endpoints that are secondary endpoints in the pivotal and exploratory endpoints in this pilot study include the cardiometabolic lipid profile and food craving patient-reported outcomes. And these results are totally consistent with the emerging clinical understanding of Revita's impact on metabolic disease. Starting with cardiometabolic parameters at 6 months, Revita-treated patients demonstrated improvements in HDL cholesterol with a p-value of 0.01 and in triglyceride to HDL ratio with a p-value of 0.03 compared to sham. These are both well-established markers of improved insulin sensitivity and lipid handling, and we have seen improvements in the parameters in prior clinical studies of Revita as well. This is a nice confirmation of what we've previously seen.

Importantly, we also looked at patient-reported appetite and craving. We have heard anecdotally in prior studies and open-label work that patients describe less food noise after Revita. Here, Revita-treated patients reported significantly reduced craving for sweet foods compared to sham with a p value of 0.04. Clinically, sweet food craving is one of the earliest and most powerful drivers of post GLP-1 rebound. Seeing the signal reduced at 6 months is consistent with Revita's proposed gut brain mechanism and helps explain why Revita may help maintain a lower body weight set point.

Now turning to safety. I will be brief because the story here is very straightforward. There were no new related adverse events between the 3-month and 6-month follow-up, which reinforces the stability of the safety profile as we extend the duration of follow-up. Taken together, the data continue to support Revita as a procedure that is well tolerated, is scalable and appropriate for broader clinical use, which is critical as we advance towards pivotal readout and regulatory review. On the basis of everything we've just shown you, we believe that we are addressing the key risks in the REMAIN-1 pivotal study. We see excellent safety, tolerability and importantly, signals of activity in the midpoint cohort.

The midpoint cohort also gives us confidence that the pivotal study is appropriately powered for success. And all of this is prelude to the observation that the pivotal cohort is proceeding very well and ahead of plan. We are very confident in what we are heading into later this year. Remember, the midpoint cohort was designed to mirror the design and execution of the pivotal cohort with the same inclusion and exclusion criteria, the same physicians and the same endpoints. And in the pivotal cohort, we will measure the percent weight regain at 6 months, the responder rate at 12 months, and I'd like to update that the study is fully enrolled. We have randomized approximately 95% of the participants. We expect to complete randomization in February and are on track for top line pivotal data and potential FDA filing in the second half of 2026.

Now turning to our regulatory path. We've had a very productive interactive dialogue with the FDA regarding Revita's encouraging safety and tolerability data to date. In light of these discussions, we requested FDA feedback on potentially reclassifying Revita under the de novo pathway instead of a PMA. We see the potential for the de novo pathway to enable a more efficient risk-based regulatory review process that has a potential to reduce our time line to U.S. launch, if accepted and to enable label expansion as we go in a much more straightforward manner than a PMA would offer. We expect to receive feedback from the FDA in the second quarter of 2026. But based on discussions we already have had, we feel very confident that this pathway will be granted.

Now turning to our regulatory and reimbursement milestones over the next 2 years. We see an opportunity to leverage well-established FDA breakthrough device designation and CMS transitional pass-through mechanisms as we prepare for commercialization. We start with the observation that an FDA breakthrough device designation in hand provides a well-defined regulatory path with an opportunity for ongoing interactive dialogue with the FDA as we just described we're having. We just shared with you the exciting 6-month randomized midpoint data, which we believe reads on the likelihood of success of the pivotal study later this year. And we also anticipate filing for a CPT code and completing our FDA submission in the back half of this year. We believe that CPT code may go into effect at around the same time as a potential FDA approval next year.

And then immediately following FDA approval, we anticipate filing for CMS transitional pass-through payment for the Revita device. This would allow us to begin commercialization in hospital-based centers of excellence where we already have excellent relationships with payment to be established for those centers via the CPT mechanism. Taken together, the pathway is for a targeted and efficient commercial model at Revita centers of excellence. We believe that Revita can be delivered in endoscopy suites across the U.S. if approved. There are approximately 2,000 to 4,000 of these endoscopy suites in the U.S. alone with an estimated capacity of up to 1,200 procedures annually at each of these centers, meaning we believe there's capacity to perform between 2 million and 4 million new procedures annually using existing infrastructure in the United States as it exists today. And all of this creates a potential for a capital-efficient launch, leveraging existing infrastructure and existing patient flow through the health care system.

Now turning to our anticipated near-term catalysts. We see a catalyst-rich year ahead, starting with today's presentation of our randomized 6-month data. Next, we anticipate completing randomization in the pivotal cohort in February. We expect both FDA feedback on our potential de novo pathway and 1-year data from the REVEAL cohort in Q2, 1-year randomized data from the REMAIN-1 cohort in Q3 and in the second half of the year, 6-month primary endpoint data and potential FDA filing very much on track.

So in closing, we see a path to positive pivotal data, potential FDA submission and robust commercial readiness. The key elements are pivotal study execution, regulatory progress and commercial readiness. Thank you very much. Operator, we are now ready to take questions.

[Operator Instructions] Our first question is from the line of Jason Gerberry with Bank of America.

This is Chi on for Jason. I have a few, if I may. But the first one is, can you talk about your expectations for the pivotal 6-month readout based on today's results? Today, you reported about 40% difference in rate weight gain profile at month 6 between the 2 arms within the prespecified efficacy population and can you contextualize the 5 subjects that were excluded in the prespecified population? I'm curious, were those same exclusion criteria prespecified? And if you were to do the pivotal cut, would you expect the same exclusion type criteria to be applied to the primary analysis in the pivotal cohort? And I have a couple of follow-ups.

Sure. So based on the enrollment in the pivotal study, where patients have slightly higher weight loss in the run-in period than what we're seeing here, we expect to see a 50% reduction in weight regain in Revita versus sham, and we expect to see an enrichment for even greater effect in those patients with greater weight loss based on what we are seeing today and our understanding of the biology. And so we are feeling quite confident based on the data that we are seeing that we are very well powered for success against that metric with 315 patients. And everything that we're seeing suggests that we're very much on track for that. The 5 patients who were excluded due to a prespecified exclusion in the small pilot study of successive nonadherence to diet and lifestyle recommendations over at least 3 visits. And in the pivotal study, we will have a sensitivity analysis that would look at this population as well.

Okay. And my second question is, can you contextualize the -- today's data relative to the regulatory bar? I recall the agency that want to see a certain effect size between the Revita arm and the sham arm. I think it's 50% less regain in 1 year. Can you talk about that?

Yes. So there's only -- to be very clear, the FDA only -- our conversation with the FDA lead us to believe all we need is a p-value of less than 0.05 2 sided at 6 months in the 6-month co-primary endpoint. And in addition, we need at least 50% of Revita patients to have maintained at least 5% of the weight that they had lost on tirzepatide at 1 year. And we are incredibly well on track for those regulatory milestones. So the core question is like, do we see data that is sufficient for Revita to be approved? Absolutely, we are confident that we do. Do we see data that is sufficient for Revita to be utilized? We absolutely do, and we are very confident that we are heading towards something that is not only going to be approved, but also used.

Got it. And just one last one for me. I may have missed this from this slide, but I don't see a time lapse with the 3-month and the 6-month data together. Can you talk about the kinetics of the weight regain profile between the Revita arm and drug arm? Quite honestly, I'm working with imperfect data, but I am seeing a different weight regain profile between Revita arm and sham arm between month 3 and month 6, potentially more weight regain from the Revita arm than the sham arm. Are you seeing a catch up in weight reading from Revita arm between month 3 and month 6? Can you talk about that?

Sure. I did mention that we did observe that there is one site where there is a high degree of variability in weight regain. This was actually picked up through central statistical monitoring. The site is not actively contributing to the pivotal cohort as a result. And when you back that site out, there is an expanding difference in treatment effect between Revita and sham between month 3 and month 6. And so we do -- we are in a situation where one site is contributing materially here. We do not expect them to contribute materially in the pivotal. And what we are seeing in the remaining sites is very consistent with an expanding treatment delta, which we would expect to see in the go forward as well.

Our next questions are from the line of Michael DiFiore with Evercore ISI.

Just 2 for me. This analysis had 5 less patients versus the 3-month analysis, obviously, due to noncompliance. Just how much weight did these 5 patients initially lose on tirzepatide? And then I have a question, a follow-up.

These 5 patients, we didn't see any relationship between -- they were across the spectrum. There was nothing specific about them in terms of their weight loss on tirzepatide.

Okay. Also, in the exploratory analysis, I noticed that the Revita-treated patients regained roughly the same amount of weight compared to the overall analysis. I think it was around 4.5%. Could this be the norm for what we might see in the pivotal cohort where like 4.5% could be expected? Or is it too early to tell?

It's too early to tell. But one thing I will tell you is that the main objective here in the pivotal study is to be able to demonstrate a difference between Revita and sham. And whether you look at the full cohort analysis or you look at the -- this other -- this exploratory cohort, we are very, very confident that we are seeing a difference between Revita and sham. I think that the REVEAL open-label cohort gives really good visibility into what one might expect to see in the real world. That's why we have 2 complementary data sets. And we also, as I mentioned before, have one site in this pilot that's not contributing meaningfully in the pivotal that is driving the average weight regain much higher than the other sites. So we actually expect that the weight regain in the pivotal arm in Revita will be lower than what you're seeing here.

Our next questions are from the line of Mike Ulz with Morgan Stanley.

Maybe just a follow-up. I guess, versus the 6-months open-label data you shared previously versus today's data, it looks like you're seeing more weight gain over that period. Just curious, any thoughts on what's specifically driving that? Is that related to the site issue you mentioned? Or is there other things going on there? And then I have a follow-up.

It's related to the site issue because if you back it out, it looks remarkably similar to what we saw at the -- in the open-label cohort. That one -- This is a small study. Remember, it's 45 patients. We enrolled the first centers that opened up for enrollment are the ones that contributed here. One site contributed meaningfully to the pilot cohort, not to the pivotal, and that site had higher-than-expected regain across both arms, though there was clear Revita effect. And I think that's why we're seeing -- look, at the end of the day, what we're seeing is clear evidence of efficacy, a slightly higher regain number in the Revita arm than what we would like to see. And we believe that, that's unexplained and controllable, and that's the benefit of having done this pilot study in order to help make sure that we're on track to have a really compelling profile in the back half of this year.

Got you. And then maybe since you're seeing greater delta in those patients that lost more weight on GLP-1s, are you considering maybe exploring that further in the future?

That is absolutely already the intent, and it always has been the intent to do so because it is well known that patients who lose more weight on GLP-1 are at greater risk of rapid weight rebound. It's why we selected 15% as a cutoff for entry into the randomization phase. And we fully expected from the start of the study that patients with more weight regain will be at greater risk of rebound. And I think the way to understand this is like if you've lost a little bit less weight, you might be able to control your diet and lifestyle better because you're not so far away from your metabolic set point. But the people who've lost 20%, 18-plus percent of their total body weight as we're looking in the study in this population, it is very hard for them to control their food noise and very hard for them to control their -- or prevent weight regain, and that's where Revita really shines.

The next questions are from the line of Whitney Ijem with Canaccord Genuity.

So I guess just to follow up on that last question then. The analysis of patients in the kind of -- who had more median weight loss, those patients, is that prospectively designed in the SAP plan of the Phase III? Or are you saying you're going to be adding that in?

It is prospectively defined in the stat plan for the SAP. We are waiting FDA feedback on that stat plan, but we are absolutely -- it is absolutely the intent. It is absolutely in the design.

Okay. Got it. And then you also just mentioned kind of some of the changes or observations in this cohort kind of are controllable and kind of can inform the Phase III. So are there any other changes, I guess, happening to the Phase III based on this data, stat plan or otherwise?

I think it validates things that we're doing in the Phase III, like a statistical analysis plan that you just mentioned and the central statistical monitoring that we have in place. It validates the things that we're otherwise already doing.

Got it. Okay. And then just last one for me. You mentioned that the FDA just wants kind of the p value at 6 months and wasn't looking for a particular delta. Is that also true of payers? Or how have payers been thinking about what they want to see at 6 months?

I think payers are focused on demonstrating efficacy at 6 months like what we just talked about with the FDA. And then I think they're also going to care about how does this perform in the real world compared to what you might expect from GLP-1 withdrawal. And so in that case, I think that we're really shining. So I think we have a very compelling argument to payers. I would point out that CMS TPT pathway is statutory, and it's very much tied to the FDA approval. So when you ask about payers, I'm referring more to commercial, whereas Medicare is more of a statutory process.

Our next question is from the line of Joe Pantginis with H.C. Wainwright.

Most of my questions have been answered, but I'm just curious, when you consider the long-term profile of Revita, how have today's data provided any evolution to your thinking about future retreatment prospects?

Yes, great question. I think that the -- when I look at the totality of the data from this -- from today, combined with what we have seen before, we continue to feel confident that we're going to see 2 years of durable efficacy from the Revita procedure even in this patient population. We said we see that in the majority of the sites that the patients are heading towards a very stable trajectory like what we saw in the REVEAL open-label cohort. And with all of that, in view. We do think that this is a procedure that may be repeated after a couple of years or more, but we continue to have confidence in the durability that would be sufficient for this to be a very compelling marketable product.

Our next question is from the line of Jeffrey Cohen with Ladenburg Thalmann.

Two quick ones, Harith. Firstly, as far as the steps with the agency on de novo versus PMA, what will we hear about? And when will we hear that? What steps are left from your side?

Well, I think we've already filed a reclassification request, and you're going to hear about FDA feedback in Q2.

Okay. Got it. And then when you talk about the above median weight loss in the subset, any metabolic signals that you've seen as far as biomarkers for those patients that stand out in particular? Or that was just a pure percent loss?

Percent total body weight loss. It stood out in the prospective statistical analysis like a sore thumb that the magnitude of the weight loss really correlates to the magnitude of the risk of weight regain and the delta between Revita and sham. And so we feel like this is a very clear signal. It's biologically grounded. It's highly rational. It's what anyone would have predicted based on what they know about GLP-1 rebound risk. And so we feel very confident that we've enriched for that population in the pivotal cohort, and we look forward to those results later this year.

At this time, I'll turn the floor back to Harith for closing remarks.

Well, thanks, everyone. You've seen the data. We walked you through what we're observing and why we believe that we have substantially derisked the pivotal study. The next steps are clear. We're going to continue to drive towards pivotal cohort top line data and potential FDA submission later this year. We believe that Revita has tremendous potential to solve the single biggest problem in obesity today, and we're going to look forward to updating you on our progress with the catalyst-rich year ahead. Thank you very much.

Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may now disconnect your lines, and have a wonderful day.

Good afternoon, and welcome to Fractyl Health Third Quarter 2025 Financial Results and Business Update Call. As a reminder, this conference call is being recorded [Operator Instructions].

I'll now turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyl. Brian, 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. Joining us on the call today are Dr. Harith Rajagopalan, Chief Executive Officer; and Lisa Davidson, Chief Financial Officer.

During this call, we'll make forward-looking statements which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, including the quarterly report on Form 10-Q filed today, which I encourage you to review. Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements, even if subsequent events cause the company's views to change.

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

Thank you, Brian. Good afternoon, everyone. This quarter marked a major inflection point for Fractyl. We delivered the first randomized, double-blind, sham-controlled data showing that a single Revita procedure can sustain weight loss after GLP-1 drug discontinuation. We believe Revita addresses one of the most urgent challenges in obesity, which is how to maintain success once therapy stops.

We also strengthened our balance sheet to support our upcoming clinical and regulatory milestones into early 2027, and we continue to advance our clinical programs ahead of schedule, setting the stage for a series of important catalysts on weight maintenance over the next several quarters.

Across every front, clinical, regulatory and financial, we are building momentum toward what I believe will be the most exciting and definitional 12 months in our company's history. The science is working, the data are strong and the opportunity ahead of us has never been clearer.

Let's start with Revita. Revita is our endoscopic procedural therapy designed to remodel the duodenal lining via hydrothermal ablation to address a root cause of metabolic disease. Revita resets the gut's metabolic control system, the duodenum, which is a key site of nutrient sensing and signaling in the gut and is hardwired to the brain through a key gut-brain connection that controls body weight and blood sugar.

Decades of high fat and high sugar diet can damage this duodenal lining, disrupt gut-brain signaling and drive hunger and insulin resistance. Revita is designed to remove this damaged tissue and allow a healthy new lining to regrow, restoring normal gut-brain signaling and metabolic balance. It's like LASIK for obesity.

Since enrolling the first patients in our REMAIN weight-maintenance program in August of 2024, the last 5 quarters have been a period of incredible clinical operational execution and momentum. In September, we reported 3-month data from the REMAIN-1 Midpoint Cohort. Revita-treated patients lost an additional 2.5% of total body weight, while patients in the sham group regained about 10%, a statistically significant and clinically meaningful separation after the discontinuation of tirzepatide.

The procedure was well tolerated with no related serious adverse events. These results not only materially derisk the pivotal readout ahead, they also represent a true turning point in metabolic medicine. If Revita continues to sustain weight loss at 6 and 12 months, in line with the durability we have seen across prior clinical studies involving hundreds of patients with Revita, we believe we will have a transformative new treatment option in obesity. Enrollment in our REMAIN-1 pivotal cohort was completed in Q2 and randomizations in that cohort are progressing ahead of schedule.

As of October 31, we have randomized over 60% of the pivotal cohort patients, and we are on track to complete randomization of the full 315 participants early next year. This pivotal study has advanced ahead of plan from the outset, and we are executing it with the focus and precision that this opportunity deserves.

Looking ahead, we expect a rich set of value-creating catalysts in the coming quarters, 6-month data from the REVEAL 1 open-label cohort this quarter, 6-month randomized data from the REMAIN-1 Midpoint Cohort in the first quarter of 2026 and top line pivotal data and potential PMA submission in the second half of 2026.

Based on prior Eli Lilly studies, patients who stop GLP-1 therapy typically regain about 10% of their body weight by 6 months. We believe that Revita can be a highly successful therapy if it cuts the rate of weight regain in half, so roughly less than a 5 percentage point weight regain at 6 months, which would represent a clinically meaningful and substantial benefit for patients and a strong validation of Revita's potential.

We believe Revita is defining a new therapeutic category in obesity post GLP-1 weight maintenance, a category that complements, not competes with chronic drug therapy and provides the off-ramp that patients and physicians have been waiting for. Millions of Americans are expected to discontinue GLP-1 therapy over the next year. Every one of them will face the challenge of keeping the weight off. Revita is built for that moment.

Durability is central to Revita's value, and a huge advantage compared to chronic pharmacology, and we continue to see encouraging real-world durability outcomes in Revita clinical studies, including in Germany.

In our German real-world registry study, 30 patients have now reached 1 year of follow-up and 14 patients have reached 2 years of follow-up. The first 14 patients with 2 years of follow-up maintained an average total body weight loss of 9% and a 1.7% reduction in HbA1c in a patient population with advanced type 2 diabetes, despite a net reduction in medications.

Three-month results were highly predictive of 6-, 12- and 24-month results. These durable outcomes not only strengthen our confidence as we move toward a pivotal readout in REMAIN-1, but also underscore Revita's potential to deliver long-lasting benefit in real-world settings. By this time next year, we expect to have 1-year open-label data in weight maintenance, top line data from our REMAIN-1 pivotal cohort and a larger sample of patients with 2-year data and beyond from our German real-world registry study.

Taking these clinical proof points together, we believe Revita will have a compelling and comprehensive clinical data package that will be ready for both regulatory filings and reimbursement discussions by the second half of next year. Revita's durable activity also drives its economic rationale by potentially reducing the need for ongoing drug therapy and reducing the risk of downstream adverse health outcomes, it offers a multiyear health and cost advantage for payers who are seeking sustainable alternatives to chronic GLP-1 treatment.

In light of this, we are encouraged by the recent announcement from the U.S. government on GLP-1 access in Medicare. Expanding access to these medicines is good for patients, and it's good for the field. More patients starting GLP-1s, either as injectables or as orals also means more patients who will eventually need an off-ramp when most, inevitably, discontinue treatment.

Our clinical work and our relationships have also positioned us well for rapid activation once Revita is approved. Many of the physicians participating in our clinical studies are experienced users of the procedure, committing to treating obesity and metabolic disease with their endoscopic skills, and they are based at leading centers across the country, already active at major clinical centers from Miami to Seattle, from New England to Southern California and together with partners like Bariendo, we have already established and have a ready-to-activate footprint at several of the highest volume endoscopy centers in the U.S. This enables, in our view, a targeted and efficient commercial model for us or our partners to access upon approval.

Our market analysis confirms the size and strength of this opportunity. Because the procedure fits naturally into an existing endoscopy workflow, Revita could reach nearly 1 million annual procedures at peak adoption, translating to a sizable revenue opportunity.

Importantly, Revita's unit economics create strong incentives for adoption at the clinical site level. We expect gross margins for participating centers to be comparable to or better than other advanced endoscopic interventions, creating meaningful financial alignment between clinical and commercial stakeholders.

Taking a step back, what we are talking about is potentially the first scalable therapy that addresses the root cause of obesity and type 2 diabetes and can change the trajectory of both diseases. If Revita is successful in post GLP-1 weight maintenance, a hard-to-treat and high unmet need patient segment, we believe it can be effective across the spectrum of metabolic disease, not only for maintenance, but also as frontline; not only as a stand-alone therapy, but also in combination with weight loss medications.

Turning to Rejuva now, our Smart GLP-1 platform, we continue to make exciting progress. Earlier this month, we presented new preclinical data from RJVA-002, our candidate for obesity, which showed nearly 30% body weight loss after a single dose in a translational obesity model with no observed adverse effects.

RJVA-001, our lead candidate in type 2 diabetes is designed to reprogram pancreatic islet cells to secrete GLP-1 in response to glucose with the goal of restoring physiologic hormone regulation and achieving long-term metabolic remission. We have now completed our preclinical CMC and lot release for our RJVA-001 drug product. And with all preclinical milestones now checked off, we remain on track to dose the first patients and report preliminary data in 2026.

Between Revita and Rejuva, complementary endoscopic approaches designed to reset the gut and reprogram the pancreas, we are building a platform that can fundamentally change how metabolic diseases are treated. Our differentiation is our strength. Our product candidates are designed to do what the majority of patients need, but current therapies cannot deliver; durable, physiologic and designed to work with the body, not against it.

Now let me hand it to Lisa to discuss our financials.

Thank you, Harith. Turning now to our financial results for the third quarter of 2025. For the quarter ended September 30, research and development expenses were $17.5 million compared to $19.0 million for the same period in 2024. The decrease was primarily due to reduced spending on the REVITALIZE-1 study and lower stock-based compensation expense, partially offset by continued investment in the REMAIN-1 pivotal study and Rejuva program.

Selling, general and administrative expenses were $5.2 million compared to $4.8 million in the third quarter of last year. The year-over-year increase primarily reflected onetime costs associated with the issuance of warrants in connection with our August underwritten public offering.

We reported a net loss of $45.6 million compared to $23.2 million in the same period of 2024. The variance was largely driven by a $23.5 million non-cash accounting change in the fair value of warrants and does not reflect a change in our underlying operating performance.

As of September 30, 2025, we had approximately $77.7 million in cash and cash equivalents. With the proceeds from our recent $83 million in underwritten offerings, we expect our cash runway to extend into early 2027. funding key milestones, including 6-month randomized data from the REMAIN-1 Midpoint Cohort, top line pivotal data and our potential PMA submission. Overall, we remain in a strong financial position, well capitalized to advance our strategic and clinical priorities in the quarters ahead.

Back to you, Harith.

Thank you, Lisa. As we look ahead, the path for Fractyl Health is clear and compelling. Within the next 12 months, we expect multiple catalysts that will transform the company. REVEAL 1, 6-month data in Q4, REMAIN-1 midpoint 6-month data in Q1, REVEAL 1 1-year data in Q2, top line pivotal data and potential PMA submission of our PMA to the FDA, both in H2 2026, all funded by a strong balance sheet that extends into early 2027.

Each of these milestones moves us closer to delivering a first-in-class, durable, non-drug solution for obesity and type 2 diabetes. With those catalysts ahead, our growing body of data, expanding clinical footprint and strengthened balance sheet, we are entering 2026 with confidence, clarity and purpose. I am incredibly proud of how far we have come, and I'm more excited than ever about where we are headed.

With that, I would like to thank the people who make this work possible. To our employees, thank you for your relentless drive and belief in our mission. To the physicians and investigators advancing our clinical programs with care and commitment, we are proud to partner with you. And to the patients participating in our trials, thank you for your courage and your trust. To our investors, thank you for your continued support and conviction. Together, we are building what comes next in metabolic medicine.

Operator, we are now ready to take questions.

[Operator Instructions] And our first question comes from the line of Jason Gerberry of Bank of America Securities.

This is Chi on for Jason. I guess, Harith, could you just walk us through what you are looking for with the 6-month update for REVEAL-1 in 4Q and also the 6-month update for REMAIN-1 midpoint in 1Q as you think about -- looking at Revita profile as it pertains to, say, durability of benefit?

Sure, Chi. Thanks for the question. The 6-month REVEAL data set coming up later this quarter will be our first look at patients 6 months after stopping a GLP-1-based therapy and then undergoing Revita procedure. We have hundreds of patients' worth of experience in type 2 diabetes with Revita as a primary therapy, all of which have shown that 1- and 3-month results are excellent predictors of durability at 6, 12 and 24 months. And so, our hope would be to see a similar consistency of results between 3 months and 6 months.

Based on SURMOUNT-4's tirzepatide data where tirzepatide was withdrawn, patients typically regained about 10% of their body weight within 6 months after discontinuing treatment. So, looking at REVEAL and REMAIN upcoming 6-month data, if Revita patients are able to regain less than half of that body weight or less than 5% total, that would be a very compelling outcome and a very strong signal heading into the pivotal trial.

Remember that 6 months is important because it is also the timing of the pivotal trial's primary endpoint. And so, because of the fact that our REVEAL open-label data at 3 months translated to the main randomized data at 3 months, we're very hopeful and optimistic that the 6-month data from REVEAL and the REMAIN midpoint will translate very directly to positive read-through for the full pivotal study, whose data are expected next year.

Yes. That sounds great. If I may squeeze one in. It looks like the pivotal cohort for REMAIN-1 is randomizing ahead of schedule. It looks like you're expecting randomization to complete in early 2026. And as we think about the primary analysis being 6 months, should we expect potentially a readout early part of second half 2026?

Yes, that is a very reasonable expectation, Chi. We are heading towards completing randomizations early in '26. The last patient visit, we expect early, as very early in the latter half of the year. And so, we feel very confident based on where we sit today in the timing of our pivotal top line readout and PMA submission, both in the back half of '26.

And I will also say that while we've -- as I mentioned, we've completed randomization in over 60% of the patients as of end of October, we are randomizing every single day, every single workday, and we have good line of sight to the completion of randomizations early in '26.

Our next question comes from the line of Umer Raffat of Evercore.

This is Michael DiFiore in for Umer. Congrats on the continued progress. A few for me. On Revita, just would like some clarity on the German registry data, where you said that patients have maintained an average total body weight loss of around 9%. My question is, in the 14 patients that have reached 2 years of follow-up, what was their average weight loss at 1 versus 2 years? I just kind of want to get a sense of, if efficacy has waned at all in this specific subset of patients? And then I have a follow-up.

Sure. The answer is, there's absolutely no waning of effect between 1 year and 2 years. In fact, I believe that there is a slightly greater weight loss at 2 years than 1 year. The numbers I have in front of me are 8% weight loss at 1 year and 8.9% weight loss at 2 years. I want to put this in context, if I may. These are patients with advanced type 2 diabetes. Their BMI was 32. They are mostly men. That means these are the people who are hardest in whom to achieve weight loss.

And what that 9% means is that you are achieving very significant and clinically meaningful and sustained weight loss maintenance in a population of individuals and whom it is very, very hard to get any weight loss at all. In addition, the large improvements in hemoglobin A1c in these patients actually tends to translate to harder to achieve weight loss as well. So, all of this was seen in the context of a substantial reduction in hemoglobin A1c and a significant net reduction in medication utilization.

In fact, I suspected, Mike, that you were going to ask me a question about GLP-1 use and not. And what I will tell you is, there is less medication utilization at 2 years than there is at the -- in the start of the study. And if you sensor out the small number of patients who are on more medicines, the treatment effect is unchanged in the overall cohort. And so, we feel very, very confident about what this means for Revita's clinical profile.

Both from a potency and from a durability standpoint, we think this translates directly to what you might expect to see in how REMAIN will perform in terms of both of those dimensions. And we think that payers will really care that Revita can do something reliably in the real world, which we know is a major problem in the obesity landscape today, where real-world results with most of the modern pharmacology is woefully underperforming relative to what Phase III showed because of treatment discontinuation, under titration and other factors that limit the effect of these medicines in the real world.

Excellent. Very, very helpful. And just a follow-up on RJVA-002 for obesity. Just curious at this point if you're able to disclose the relative GLP versus GIP receptor potency and affinities. And also, what would be the average circulating active GLP levels in mice? So, would it be greater than the 10 to 20 picomolar levels that have been seen with RJVA-001?

So, with respect to the relative GIP versus GLP ratios, this is something that we have actively optimized and have data on, but we have not shared publicly. But we do know that certain ratios work better than others. Happy to disclose that. We haven't yet compiled the GLP-1 circulating levels, but it's a wonderful opportunity for me to pivot to talking about the GLP-1 levels with RJVA-001, which is soon to enter the clinic.

We were just coming out of Obesity Week and having a number of interesting conversations with obesity experts, and we have a fascinating and incredibly compelling aspect to RJVA-001 in that we have drug-like efficacy with 1/10 the circulating GLP-1 levels that are normally seen with these medicines, which implies we can achieve the efficacy and potency of these medicines and in some cases, exceed it, but are expecting far less in terms of tolerability issues because it's acting through more endogenous means locally in the gut rather than hitting the brain CNS receptors, which is where tolerability issues arise with current pharmacology.

Our next question comes from the line of Mike Ulz of Morgan Stanley.

Maybe just a follow-up on the Revita durability question for the German registry. It looks like out to 2 years, you're seeing a nice durable effect there. But just curious what the variability is among the patients and how tight that is?

It's remarkably consistent, I've got to say, Mike. I will follow up on -- some more detail on that, but you can just tell from the error bars in the graph that is in our updated corporate deck that the vast majority of patients who lose weight at 3 months maintain that body weight loss all the way through 1 year. And the error bars are not really getting wider over time, which tells us that there is a remarkable consistency to the weight loss maintenance here.

It's very encouraging for us, as a signal. And let's just say, we are continuing to follow these patients. So, we have a nice sample of patients at 1 year and 2 years. And if you roll the clock forward, we're excited about the ongoing demonstration of durability entering into 2026 as we continue to follow these patients.

Great. That's helpful. And then, maybe just a follow-up on Rejuva and assuming you get the CPA cleared and you start the study next year, you mentioned potential for some preliminary data. Maybe just talk a little bit about what might be included in that preliminary data.

Well, we're focusing, first and foremost, on feasibility, safety and preliminary PK and PD profiles. And so, I think that as we enter into the new year, once the CTA is approved and we have crystal clarity on when the first patients will be dosed, be happy to answer that question for you.

Our next question comes from the line of Whitney Ijem of Canaccord Genuity.

This is Angela on for Whitney. Congrats on all the progress. Just a quick one from us. Can you remind us, are there diet and lifestyle measures taken for patients after they receive the Revita procedure in the studies? Are they getting counseling? Or are they following a program?

There are diet and lifestyle measures. They start when patients enroll in the trial even before they begin taking tirzepatide in the open-label run-in phase, and they continue all the way through end of study. So, there is no change to the diet and lifestyle per se at the time of Revita. It's an ongoing standardized diet and lifestyle recommendation. And those who are providing that recommendation are blinded to treatment allocation.

Got it. Are you able to disclose what those measures are?

Yes, we modeled it after very much what a semaglutide and tirzepatide Phase III studies used, which is a 500-kilocalorie net calorie deficit every day and 30 to 40 minutes of exercise 3 to 4 times a week, roughly.

Our next question comes from the line of Jeffrey Cohen of Ladenburg.

Just 2 questions from us. I guess, firstly, Harith, could you talk about -- let's go back to the German study. Were those patients type 1s or type 2s? And what percent were on pumping versus MDI?

Those patients were type 2 diabetics, Jeff, and most of them were on non-insulin medications. They were on an average of between 1 and 3 medications. Only a small number were on insulin. But what we are seeing is consistent data, independent of the background medication. The single biggest determinant of effect for Revita, both on weight and on blood sugar is whatever their baseline weight and blood sugar was rather than their background medicines.

Okay. That's helpful. And then secondly here, I know we talked about it earlier, but could you talk about CPT codes and how the payers are thinking about the procedure? I know there's been some changes on some codes, particularly in ablation and argon plasma.

Sure. We -- there are no CPT codes today for the Revita procedure, and we are actively working with reimbursement and market access experts on developing a road map towards establishing CPT coding ahead of approval in the United States. We will have more to share on the specifics of our reimbursement strategy when next we -- at our next earnings call.

Our next question comes from the line of Joe Pantginis of H.C. Wainwright.

I promise I won't be typing during your answers. So first, with regard to the comments that you made, obviously, from Lilly historical data and the patients regaining about 10% of their weight over 6 months, I just want to get some clarity or even a reminder that following the midpoint 3-month data, how these patients in the sham group fared based on the recovery of the Lilly data, the comparison.

Well, as you know, and I appreciate the question, Joe, in our Midpoint Cohort, patients who had lost 18% of body weight while on tirzepatide regained 10% of that body weight in the sham arm by 3 months. I told you that tirzepatide data from Lilly suggests 10% weight regain by 6 months. So, we saw a little bit more of that in the Midpoint Cohort than what Lilly showed.

A couple of points. We're generating new data here because what we have done is we've taken tirzepatide. We are choosing only patients who have achieved at least 15% body weight loss, and we're choosing those patients who get there quickly. Both the size and the speed of weight loss are thought to also correlate with the size and speed of weight regain. So, one of the cruel aspects of starting and stopping GLP-1s is that the more effective and rapidly the drug works, the more vicious the rebound will be.

As the drugs get better, as you go from tirzepatide to even whatever comes next, and you start hearing about drugs achieving greater and greater weight loss, you can immediately interpret that, that is likely to mean that the rebound of weight regain will be that much more violent and severe.

We would expect in our Midpoint Cohort and in our pivotal cohort, a more or less linear rate of weight regain over the 3- to 6- to 12-month period of time. And we ourselves are incredibly interested to see what that weight regain picture will look like at 6 and 12 months. But the best data we have, as I said, is 10% regain at 6 months from Lilly's own data.

Really appreciate you highlighting that as part of the process. And then, sticking with Revita and my last question is, how would you sort of define your needs nearer term and intermediate term with regard to manufacturing needs and expansion?

Well, in the near term, we feel very good about our ability to support the clinical study, and we are now turning our attention with the excellent data that we just shared to ensuring that we have adequate manufacturing to be ready for scale. We have a -- just as a reminder for people, we do all final assembly and testing of our Revita catheter in our facility. And we have ample capacity to support our anticipated volumes for the coming years.

But I should also say that we have subassemblies of our catheter that are currently manufactured by Tier 1 contract manufacturers who could assume larger and larger responsibilities in order to help us make sure that we meet the demand in the market. And may I just parenthetically add how wonderful it is to get a manufacturing question because that is a true sign of progress and success, and thank you for that.

Thank you. I'll now turn the call back to Dr. Rajagopalan for closing remarks.

Well, thank you very much. Thanks, everyone, for joining us this afternoon. Fractyl has exciting days ahead, lots of key catalysts coming in the coming quarters, 6-month REVEAL data, 6-month Midpoint Cohort data, 1-year data from weight maintenance in REVEAL, pivotal data; all coming within the next 12 months. We look forward to sharing updates on our progress and thank you, again.

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

Good morning, and welcome to Fractyl Health REMAIN-1 Midpoint Cohort Data Call. As a reminder, this conference call is being recorded. [Operator Instructions] I will now turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyl. Brian, you may begin.

Thank you. This morning, 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. Presenting today will be Dr. Harith Rajagopalan, Co-Founder and Chief Executive Officer of Fractyl Health.

Before we begin, I'd like to remind you that during this call, we make forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings, including the quarterly report on Form 10-Q filed on August 12, 2025, which I encourage you to review.

Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements, even if subsequent events cause the company's views to change.

It is now my pleasure to call -- to pass the call over to Harith.

Thank you, Brian. Good morning, everyone, and thank you for joining us this morning. Today is a milestone moment for Fractyl and for the field of obesity. For the first time ever, we are presenting the first prospective randomized double-blind controlled data from the REMAIN-1 midpoint cohort, in which we showed that Revita prevented weight regain 3 months after GLP-1 discontinuation.

The data we're presenting today represent the beginning of a new potential therapeutic category in obesity post GLP-1 weight maintenance, a field that we believe Fractyl is uniquely positioned to lead. And today's results are the start of a period of momentum and acceleration with 4 weight maintenance data readouts in the next year, culminating in top line pivotal data and potential PMA filing in the second half of 2026.

Today, we've also announced that we expect to have cash to fund operations into early 2027 through these key milestones. We believe this is a moment where Fractyl could step into the forefront of what comes next after GLP-1s, persistent weight loss maintenance.

When we founded Fractyl, we started with a bold hypothesis that duodenal dysfunction is a root cause in obesity and that mucosal ablation can lead to a safe, scalable and durable effect. Decades of diet-induced injury caused duodenal dysfunction, disrupt gut brain signaling, fuel insulin resistance and to drive weight gain in millions of people.

By resurfacing and regenerating the duodenal lining, we believe we can restore normal signaling, reset hunger control and create a durable metabolic reset.

In prior clinical studies, Revita has been shown to lead to sustained improvements in weight and hemoglobin A1C that lasted for up to 2 years of durable metabolic benefit, and Revita has a large safety database showing excellent tolerability with side effects that have generally been mild, infrequent and transient. Revita's effects in these clinical studies also occurred rapidly within 1 to 3 months and were sustained for up to 2 years.

The question now is whether Revita can prevent weight regain after the discontinuation of GLP-1 drugs because this has become the single most important need in obesity today. Even though they are effective, most patients stop GLP-1 drugs within a year and weight and metabolic rebound occur rapidly upon discontinuation. The first symptoms are profound hunger and food noise, often occurring within weeks of treatment discontinuation.

Patients stopping GLP-1s represent the hardest-to-treat patient population within obesity. And for this reason, Revita was granted breakthrough device designation for post GLP-1 weight maintenance from the FDA and why this is a hard-to-treat population is a compelling first population for Revita's first clinical demonstration in obesity.

Our REMAIN-1 program is modeled off Eli Lily's SURMOUNT-4 study, in which patients who were given tirzepatide for 36 weeks quickly regained almost all of the weight they had lost after stopping therapy.

Let's start with the key takeaways from our data today. The REMAIN-1 midpoint cohort randomized 45 subjects to Revita versus sham after stopping GLP-1, and the results are a resounding success, supporting the potential safety, efficacy and strategic positioning of Revita in a post-GLP-1 weight maintenance category.

First, there was clear and unmistakable evidence of Revita's activity already at 3 months. Revita patients actually lost 2.5% more body weight even after stopping tirzepatide, while sham patients regained 10% of their weight. That is a meaningful and clinically significant 12.5% treatment difference with strong statistical significance and a p-value of 0.014.

Second, just as important, Revita has continued to show an excellent safety and tolerability profile through 3 months, no device-related serious adverse events have been reported, and side effects, again, were infrequent, transient and mild.

Third, the midpoint cohort was deliberately designed to replicate the pivotal cohort with the same protocol, patient population, inclusion and exclusion criteria, clinical trial sites and treating physicians, with the goal of ensuring the greatest possible similarity to our ongoing pivotal cohort.

Today's data also represent important evidence that if Revita can succeed in this hard-to-treat population, we believe it also opens the door for Revita as a potential backbone therapy across a spectrum of obesity and metabolic disease.

Our development path has been disciplined and staged with multiple clinical cohorts studied in weight maintenance concurrently. REVEAL-1 is an open-label cohort designed to evaluate Revita's potential benefit in the real world with patients who need to or want to stop GLP-1s.

The REMAIN-1 midpoint cohort is a pilot, randomized, sham-controlled proof-of-concept study in post-GLP-1 weight maintenance, and the pivotal cohort is a single registrational study required for approval in the U.S., with randomization expected to be complete in early 2026 and top line data and potential PMA filing expected in the second half of '26.

As a reminder, in June, we presented open-label data from the REVEAL-1 open-label cohort, suggesting that Revita can potentially prevent weight regain after stopping GLP-1s. REVEAL-1 showed at the time that 12 of 13 patients maintained weight loss at 3 months after stopping tirzepatide, with 6 of 13 actually losing further weight. This is far better than the expected 5% to 6% weight regain that would have been predicted at that time point.

These were intriguing data, but they were 13 subjects and they were only open label. For this reason, we enrolled the midpoint cohort, a randomized sham-controlled study, which enrolled 45 adults with obesity without type 2 diabetes, GLP-1 naive, started on tirzepatide and titrated to achieve greater than 15% weight loss. Once they hit 15% weight loss, tirzepatide was stopped and patients were then randomized 2:1 Revita versus sham.

In the midpoint cohort of the 45 patients who were randomized, 29 were in the Revita arm versus 16 in sham, with 100% retention through 3 months across multiple clinical trial sites. Procedures were executed consistently and with high quality, showing the feasibility and scalability of this technique. All 45 randomized subjects are included in the safety and efficacy analysis today.

Screening demographics show that our patients mirror the real-world GLP-1 population with an average BMI of 37, 100 kilograms prior to starting a GLP-1, 80% of the population were female, many had pre-diabetes. These are the patients doctors see every day, meaning that the REMAIN-1 study is broadly relevant to the obesity crisis as it exists today in the United States.

After tirzepatide, both arms lost 18% of their body weight over a period of 4 to 6 months. They lost 40 pounds in that period of time before the tirzepatide was taken away.

This study was designed to create some of the world's hungriest humans. The physiologic drive to regain weight after stopping tirzepatide is enormous, and this was the toughest possible test of Revita's potential to maintain weight loss, a rigorous stress test, if you will, for Revita in weight maintenance. And that's why the results we're about to show you are so striking.

At 3 months post discontinuation, Revita patients lost an additional 2 kilograms of body weight on top of the 18 kilograms of body weight that they lost during the tirzepatide run-in period. Sham patients on the other hand, regained 8 of the 18 kilograms that they had lost. That is a 10-kilogram treatment difference with strong statistical significance of p equals 0.014.

The sham curve looks like one would expect, an immediate steady weight regain. But the Revita curve is different. Patients not only maintain their weight loss, but they actually lost more weight even after stopping tezeptide.

Here are the same data in terms of percent total body weight and confidence intervals, unmistakable evidence that Revita prevented weight regain with clinically and statistically significant results with an end of only 45 randomized patients.

This is the first randomized blinded study, suggesting that weight maintenance can be possible without chronic drug therapy. This is a game changer because it challenges the core assumption that obesity care must orbit around lifelong medical therapy. It shows that a metabolic reset may in fact be possible.

Now as compelling as a demonstration of Revita activity is, the tolerability profile and safety data are equally compelling. Here's what we saw, no device-related serious adverse events, just 4 mild, self-limited, procedure-related adverse events often seen with endoscopy. These excellent tolerability data are consistent with Revita's prior clinical study experience and are a huge asset when compared to GLP-1 drugs themselves in the management of the disease. That's it.

We believe the data suggests that Revita could offer a potential off-ramp that can be safe, tolerable, scalable and importantly, consistent with the type of procedures that endoscopists deliver for their patients every day. That's why safety here is more important than a data point. It's a key market enabler.

The midpoint cohort is designed to mirror the design and execution of the ongoing pivotal study, same inclusion and exclusion criteria, same sites, same physicians and same endpoints. In the pivotal cohort, we will measure the percent of patients -- percentage of total body weight regained at 6 months and the responder rate in the Revita arm at 12 months.

This pivotal study is fully enrolled, and we are randomizing ahead of our previously reported schedule. We anticipate completing randomizations in early 2026, whereas we had previously guided to H1 2026, with top line pivotal data and potential PMA filing expected in the second half of '26.

This is a disciplined path to potential commercialization. The midpoint cohort has already strengthened confidence in Revita's potential to safely and effectively maintain weight loss, and the pivotal cohort is the next logical step and it is running ahead of schedule.

At 3 months, we have already seen clear statistically significant evidence of Revita's effect, with a 12.5% treatment difference compared to sham. In our prior clinical work, early weight maintenance signals at 1 to 3 months were highly durable at longer time points. Meanwhile, the sham arm would be predicted to continue to gain weight based on the results from tirzepatide withdrawal from Lilly's SURMOUNT-4 study.

And because the midpoint cohort was deliberately designed to mirror our pivotal cohort, again, same protocol, same site, same treating physicians; these results today provide strong read-through to what we may expect to see at the pivotal's 6-month primary endpoint. Taken together, the midpoint cohort gives us confidence in the pivotal study design and reinforce Revita's potential to be the first therapy for post GLP-1 weight maintenance.

Enrollment in our pivotal study was incredibly fast and finished 3 months ahead of our most optimistic scenarios. At some centers, demand outstripped capacity, and it became obvious to us there is clearly extraordinary demand for a product that has the potential to be an off-ramp from GLP-1s.

For investors, we believe this should be seen as an early proxy for potential commercial adoption if we successfully develop and obtain approval. And for physicians, it validates that this procedure can fit into existing clinical practice. It underscores the incredible unmet need that we are targeting. Patients are not just willing, they are eager to find a durable alternative that will help them maintain their body weight loss after stopping medicines.

Now let's take a step back and talk about the potential commercial implications of what you have just seen. If approved, we believe Revita could be commercially attractive because it can fit seamlessly into existing endoscopy practice. GI suites already have the infrastructure, and endoscopists already perform similar procedures at scale.

On the payer side, the story is just as compelling. Health plans are grappling with the sustainability of lifelong GLP-1 spending. Revita has the potential to offer something that they are actively seeking, a durable solution for long-term weight maintenance. Early payer feedback has been encouraging, and we believe our pivotal data will be an inflection point for reimbursement and coverage.

From a go-to-market perspective, if approved, we are planning to deploy a proven sales model. A sales force would place Revita into hospitals and endoscopy centers. And it is worth noting that there are 800,000 patients with obesity who are on a GLP-1, who will get an endoscopy this year already for other reasons.

Endoscopy suites are already calling patients and telling them to stop their GLP-1 prior to these endoscopies. And most of these patients do not want to be on a GLP-1 drug for the rest of their lives. We believe many of them would choose Revita, and this is a readily accessible patient population who are already in the clinics of our treating physicians.

To summarize, the midpoint cohort achieved its goal at 3 months, one, clear evidence of activity in maintaining weight after stopping GLP-1 in the hardest-to-treat obesity population with highest unmet need; two, a clean safety profile and tolerability thus far; three, strengthened confidence in the potential for success in the pivotal cohort.

Looking ahead, we look forward to 4 major weight maintenance readouts in the next 4 quarters. The randomized midpoint cohort will have 6-month data readout in Q1 2026, the pivotal cohort is randomizing ahead of schedule. We expect to have top line data and potential PMA filing in H2 2026.

And it's worth asking, what does this mean for where Revita can go from here? The clinical data are highly compelling and the potential commercial value proposition to stakeholders is clear. We believe that Revita has a potential to have a place, not just for maintenance, but also for induction, not just for GLP-1, but also alongside GLP-1 as a potentially true new backbone therapy in the management of obesity.

This is a rare opportunity to develop and establish such a backbone therapy. We are not competing in the GLP-1 race, we are aiming to build what comes next. With Revita, Fractyl is positioned to lead the new era of obesity and metabolic disease care.

And with that, I would like to thank the people who make this work possible. To our employees, thank you for your relentless drive and belief in our mission. To the physicians and investigators advancing our clinical programs with care and commitment, we are so proud to partner with you. And to the patients participating in our trials, thank you for your courage and your trust. To our investors, thank you for your continued support and conviction.

Operator, we are now ready to take your questions.

[Operator Instructions] Our first question comes from Rohit [ Basin ] with Morgan Stanley.

This is Rohit on for Mike. Congratulations on the great data. So just in terms of the patients that you saw lose weight, can you just talk about what percentage of the 29 patients lost weight? And was there anything unique about these patients?

Rohit, as you know, when we saw the open-label data, you -- there was a significant plurality of the patients who lost weight and most of the patients maintained body weight. We're seeing a similar profile in the Revita patients -- in the Revita arm in the study as well.

Got it. Okay. And then just a second question, just any read-throughs to the 6-month data? What did you learn from this study?

I think we've given ourselves a lot of confidence in our biostatistical powering and in the design and in our teams and the site execution of this study.

And I think that we will have important 6-month readouts coming. In Q4, we'll have open-label data from the REVEAL-1 cohort. And in Q1, we'll be able to report these 45 patients, randomized patients' 6-month data. And so we look forward to being able to elaborate that profile in our upcoming milestones.

Our next question comes from Umer Raffat with Evercore ISI.

Congrats on the data. Can we touch up on three points, if I may. First, the data is obviously very unique and very intriguing at month 3. Can you speak to the relevance of what we see on weight gain through month 3 and the implications on a longer follow-up? Number one.

Number two, there's some standard error data that's disclosed here. If you try to back out the implied standard deviation using the ends we do know, could you just speak to sort of the standard deviation around the data points being shown and if there's any outlier effect driving that?

And then finally, look, the expectations were that this may result in half the weight gain as the tirzepatide arm. And clearly, we exceeded way beyond that, not only is it flat, it's actually down. I guess what is the implication for -- what's the true positioning in terms of treatment? Is it for maintenance only? Or would you consider optionality more upfront as well?

Thank you, Umer. Let's tackle those one by one.

So you asked about weight gain through 3 months. In this study, we specifically randomized patients who had achieved meaningful weight loss on tirzepatide. The average weight loss was 40 pounds. And we're seeing that these patients, within 3 months, when they stop tirzepatide; are regaining nearly 10% of their body weight.

That's a new data point, and I think it's an important contribution to the field because I think it speaks to the magnitude of the unmet need.

When you have 10 million people or more on a GLP-1, more than half of them are going to stop within a year. This is the kind of weight regain that you may reasonably expect in those who most successfully lose weight in the first place. Imagine how frustrating that is for a patient.

On the other hand, what we are seeing is not only weight maintenance, but actually some incremental weight loss. That's a highly compelling observation. The treatment difference is substantial in a short amount of time. And the read-through to 6 months for what you would expect the sham arm to continue to gain weight because that is what we have seen in prior clinical studies of GLP-1 withdrawal.

You would also reasonably expect the Revita arm to be able to continue to maintain the weight loss that we are seeing because 3-month results have historically been very predictive of 6-, 12- and 24-month experience in our prior clinical studies.

So obviously, thank you for saying it's unique and very intriguing. We agree. We also think that this portends very well for what we hope to see in the future.

Your second question on standard deviation and outliers. The fact is that when you stop tirzepatide, standard deviation arms are very broad. You look at the SURMOUNT-4 study. I think it's supplementary Appendix 2. It is very clear how broad that is.

I would actually point you to how tight our effect size is with the number of patients that we're looking at relative to the expected extraordinarily broad splay that one would normally expect from stopping trazepatide in the first place. That was a concern that we had, had going into the study. Now for both REVEAL open label and our randomized data, we're actually feeling quite encouraged about standard deviations.

And if I think about our biostatistical powering for the pivotal, these standard deviations are lower than what we were planning for, and that also portends well for the powering assumptions in the full pivotal.

Third, you asked me about the magnitude of effect and its implications. We feel incredibly encouraged for what this means for what Revita can do in obesity. We think of this not just for weight loss maintenance, but also induction of weight loss in the first place, which we've seen in type 2 diabetes, we would be eager to see in an obese population as well.

We think of this as having a GLP-1 independent mechanism of action, which means that you can use it as a stand-alone therapy or in conjunction with GLP-1s.

And so when you think about induction, maintenance, stand-alone or combination with pharmacology, I think what we're setting up is a true potential backbone therapy, one that offers the unique differentiating characteristic of being able to potentially offer a durable metabolic reset by fixing the underlying physiology for the very first time in obesity.

We think that it's incredibly powerful. We think that the market does not yet appreciate how potentially impactful this is for the entire disease category, especially when you take into consideration how scalable this technique actually is.

Our next question comes from Whitney Ijem with Canaccord Genuity.

I'll add my congrats on the data really, really exciting. I guess one question, thinking ahead to the 6-month data that will be coming, I believe we're expecting DEXA results. So obviously, the weight loss and maintenance data you showed today is really exciting. But can you speak to how we should be thinking about DEXA data? And any other kind of supportive endpoints that will be coming in the next update? And how we should be thinking about that?

Open-label data -- the next major update is going to be 6-month open-label data from the REVEAL cohort in Q4. And we will also have 6-month randomized data from this REMAIN midpoint. There is an optional DEXA scan that patients can undergo in the midpoint and in the pivotal cohorts. And we will have -- we will also have metabolic assessments that we will be able to share on glucose, insulin and cardiovascular risk factors.

So over the course of time, you're going to see a further elaboration of what is already a very compelling signal where today's emphasis is really on how potent Revita may be in the primary endpoint for the core pivotal studies' objectives.

Awesome. That's helpful. And then just to go back to some of the commercial comments you made, which were helpful. I guess, should we all be thinking about kind of the initial market opportunity here as those patients who are already going in for an endoscopy and kind of getting that call from the docs to stop the GLP-1s, and that's the kind of initial call point? Or are patients going to be seeing commercials and calling endoscopy centers themselves to try to schedule this? Just kind of help us understand that a little bit, though I appreciate it's still early.

Yes. So absolutely, what we are hearing from GI physicians is that a substantial fraction of patients who are coming in for endoscopies are already on a GLP-1 and already being asked to stop their GLP-1s prior. Some of the physicians with whom we're working are saying, we're going to offer this to every single patient who's coming in for an endoscopy, and that's why that 800,000 number is so compelling.

I have another new data point to share, which is, as you know, we signed a letter of intent with Bariendo earlier in the summer. And one of the physicians involved in Bariendo told us that when they run an ad in a community for their bariatric and metabolic services, somewhere between 50% and 80% of the people who respond to that ad are on a GLP-1 and looking for an off-ramp.

And what that suggests to us is that direct-to-consumer advertising could actually be a very efficient way in order to build upon the practice that already exists within the GI practices themselves.

And I don't want to ignore the fact that primary care physicians who are actually managing the condition, the single biggest question they're getting from patients is, "When can I stop taking the GLP-1?" And we have found that they are incredibly receptive to the idea that a durable metabolic reset could be a very compelling treatment alternative because they themselves know patients don't want to be on medicines for the rest of their life to control their weight.

So we think that all three are viable channels. We point out that 800,000 number because it's such a huge opportunity that does not require 1 iota of change in human behavior from what they're already currently doing.

Our next question comes from Jason Gerberry with Bank of America.

Given you'd be in a position to file a PMA second half next year, potentially data supportive here, I'm wondering what's most critical in your view, in terms of the ultimate 6 months, in terms of really bolstering more of an upside case, in your view, on the peak revenue potential here? Is it the spread of drug and sham arm or I guess, like coming off of trazepatide arm versus Revita, I should say, and/or the importance of just length and durability of benefit?

I'm just kind of wondering if you can revisit some of those measures. As you kind of think about filing, what really would support potentially blockbuster plus revenue opportunity?

Well, I think that there's likely three things, Jason, that would drive that. Number one is the magnitude of the treatment effect. We believe we'll have a huge market opportunity if we simply blunt the rate of weight regain by 50%.

Though we are seeing something much more impressive than that here, doesn't change the fact that that's what the market needs for this to be an extraordinary opportunity. Obviously, the bigger the treatment delta, the more impressive that will be.

We will also have 12-month data in the label, we would anticipate. And as a result, like the strength of that durability signal would also support upside scenarios.

And the third, I would say, are the ancillary data that Whitney asked about. What are -- what's happening to the risk of the development of diabetes? As you saw here, there are 40% to 50% of these individuals are prediabetic, but most of those are undiagnosed prediabetic.

So bolstering the cardiometabolic profile around the benefits of being able to maintain weight versus those who discontinue and lose those benefits very rapidly as we know, coupled with potential body composition sort of benefits of not just become -- regaining fat mass and continuing to lose the lean mass as we expect is occurring in people who stop GLP-1s; I think that sort of ancillary set of benefits would also support a very -- like very compelling clinical and medical argument around what we are offering here.

Okay. And one just follow-up for me, the single SAE, the cholecystitis that was adjudicated not related to device or procedure. Just can you talk a little bit about how that was adjudicated?

Yes. There's an independent clinical endpoint committee that adjudicated this case, occurred 65 days or so after the randomization procedure. And the fact is, if you look at the demographics of those who are enrolled in the study, largely -- mostly women who are in their 40s and who are overweight and not yet menopausal, those are the four biggest risk factors for gallbladder disease anyway.

So you're going to -- we're going to have some amount of gallbladder disease in patients as we enroll more of them. This demographic is exactly those people who are already predisposed. And given the time disparity between the Revita procedure, mucosal healing and the absence of any symptoms through the randomization to when the cholecystitis appeared, this was adjudicated independently as unrelated.

[Operator Instructions] Our next question comes from Joe Pantginis with H.C. Wainwright.

Congratulations on the data. A couple of questions on the trial itself. So first, do you have information as to how long patients were previously on tirzepatide or what the range was? And how that might impact interpretation of the data?

Sure. So as a reminder, this study took GLP-1-naive individuals. And we initiated them on tirzepatide, titrated them to 15% total body weight loss, and it took between 16 weeks and 26 weeks for these 45 individuals to get to 15% weight loss.

Perfect. Okay. And then I was curious if you could just remind because I know it does not definitely -- it does not impact the sham data, but can you describe the sham procedure?

These patients are only randomized after the catheter is inserted into the body and the catheter dwells. In the sham procedure, the catheters left there for a fixed duration that mimics the total length of the procedure. And the GI physician who performs this procedure, never sees the patient again once they are wheeled out of the room and into the recovery room. And so this is a true double blind. And I think it's about as rigorous as sham as humanly possible.

Great. That's fantastic. I appreciate that clarity again. And then lastly, for the actual procedure, and the time of doctor assessments, are there any scheduled visits or follow-up exams with the doctor before the final primary endpoint time point?

There are visits -- in-office visits at 1 month and 3 months and then the next in-office visit is 6 months, which is the primary endpoint.

Our next question comes from William Wood with B. Riley Securities.

Congratulations on the very, very nice data. Just trying to sort of tease out the effects that we're seeing here. And so I was kind of curious that alongside the weight loss improvements, you mentioned that you're also going to be collecting data on glucose and insulin.

But I was also curious if there is any -- going to be any analysis on, say, biomarkers, thinking specifically like a GLP-1, PYY, maybe ghrelin? Are there anything that could sort of support the actual benefits, this weight loss or even the weight maintenance that you're seeing? Yes.

We've tested these hormones in the past in prior studies and have not seen changes that correlate with the fact. And so we don't see serum levels of these hormones as being a driving mechanism here. We are collecting the blood for this type of an analysis, and we'll likely do that as a sub-study in the future.

Okay. And then also sort of just thinking in terms of -- have you been -- or are there plans or are you incorporating PROs into this just with the data we're seeing both in your REVEAL, but also now in the REMAIN? It looks like, in my opinion, that the patients might be feeling a lot better or having a very positive result. So I was just curious, how that data or those -- that perception, whatever it may be from the patients may be being collected?

We're collecting and tabulating PRO data. We look forward to sharing that when it's available.

Should we expect that a 6-month readout for REMAIN? Or is that only in the pivotal?

Let me get back to you on that. I'm quite confident we're collecting them in the midpoint cohort as well.

Okay. And then lastly, if I may. You obviously have a very nice cadence here between REVEAL and REMAIN between fourth quarter than first quarter, both at 6 months and then longer term, the 1 year. So I'm just trying to -- how should investors and people looking at the data sort of going between an open label and then your RCT, how should we sort of be trying to read through from REVEAL to REMAIN and then eventually to the pivotal?

Well, when we showed 3-month data in June from the open-label cohort, it was highly intriguing, and investors -- some investors got excited about it. And I think some remained skeptical because they wanted to see randomized data.

Now that we've shown randomized data and the Revita arm is performing as well or better than the open-label cohort, I think we would then look at the 6-month open-label data that will be coming and view it through the lens of what we have just seen.

I hope that what all of this serves to provide are complementary pieces of evidence around the potential effect for Revita in both a real-world registry-type setting, which is what the REVEAL-1 open-label cohort is, as well as on controlled conditions.

And my view that the market, payers and the other stakeholders can benefit from seeing the totality of all of that evidence because they are slightly [indiscernible] to one another in their design. But the consistency of what we are seeing so far clearly gives us a lot of encouragement as we go into the upcoming milestones.

And my last point would be that by this time next year, with 1 year open label data from REVEAL and 6-month randomized data from the pivotal cohort, one could feel reasonably confident that the entire clinical profile for Revita in weight maintenance will have been substantially derisked and can take that to also then think about the fact that we have breakthrough device designation, which portends regulatory sort of timelines and expectations and the potential for reimbursement through the TCET pathway at CMS.

So we're very excited for what's to come in the year ahead. We're very excited that we announced this morning that we project having cash through all of these major milestones that we're talking about today. So exciting time with a lot of fantastic catalysts in the quarters ahead.

Our next question comes from Jeffrey Cohen with Ladenburg Thalmann.

Jeffrey seems not to be there. I'm showing no further questions at this time. I'd like to turn the call back over to Dr. Rajagopalan for closing remarks.

Thank you. Thanks, everyone. You've seen the signal, you've seen the safety profile, you've seen the potential scalability and the enthusiasm of patients and sites to enroll our studies. Our next steps are clear with Revita: To deliver 6-month midpoint cohort data, to complete the pivotal cohort randomizations early in 2026, drive to pivotal cohort top line data and potential PMA submission next year.

We believe that Revita has an extraordinary potential to be a new backbone therapy in obesity care, and we look forward to updating you on all of our progress in the coming months.

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