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Good afternoon. And welcome to Fractyl Health’s First Quarter 2025 Financial Results and Business Updates Call. As a reminder, this conference call is being recorded. At this time, all participants are in a listen-only mode. There will be a question-and-answer session following management’s prepared remarks. I will 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. The 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 Lisa Davidson, 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-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. Thank you for joining us today. With multiple data readouts from Reveal-1 and Remain-1, key commercial insights in weight maintenance, and a regulatory filing in RJVA-001 expected over the course of the next two quarters, 2025 is poised to be a year of acceleration for Fractyl. When we went public in early 2024, we did so with a bold ambition to redefine the treatment of obesity by offering patient-friendly solutions for durable improvements in weight and metabolic control. Since then, GLP-1 drugs have accelerated a revolution in obesity care and have proven to be amazing medicines. But real-world evidence is beginning to show that there's still room for improvement to meet the needs of patients struggling with obesity today. A recent study published by researchers at the Cleveland Clinic in JAMA suggests that GLP-1s do not deliver nearly as much weight loss in the real world as they did in their clinical trials. 377 semaglutide-treated patients with obesity lost only 5.9% of their body weight in one year, representing only about one-third of the body weight loss seen in semaglutide clinical trials, even when accounting for persistent medical coverage. In addition to this efficacy gap, these drugs also have a durability gap. Today, most patients stop GLP-1 treatment in less than one year, and only a minority resume GLP-1s in the year after discontinuation. So there's a clear need for non-drug options to drive greater efficacy in the real world and to offer an alternative when patients need to stop medical therapy. At Fractyl, we are focused on solving that problem. We are pioneering scalable outpatient solutions aimed at delivering durable metabolic resets for patients, building a new category of care based on existing patient flow into GI endoscopy, and initially targeting the critical need for weight maintenance after discontinuing GLP-1 drugs. Regardless of short-term market dynamics, by nearly every operational measure, we have made extraordinary advances, positioning Fractyl at the forefront of this emerging and substantial clinical and market opportunity. Today, we are excited to share significant progress on that front. I will start with a major milestone. We have completed full enrollment of the REMAIN-1 Pivotal Cohort, which is evaluating Revita for durable weight maintenance after GLP-1 discontinuation. We filed with the FDA just in March of last year to initiate that study, received an IDE in April, obtained breakthrough device designation in July, initiated enrollment in August, and have now completed enrollment only nine months later and significantly ahead of schedule. This rapid enrollment reflects not only the significant unmet need felt by both patients and physicians for an off-ramp for GLP-1 drugs, but also clearly demonstrates product market fit for Revita in weight maintenance. Now that the study is fully enrolled and the last patients are initiating tirzepatide therapy, based on our observed time to achieve 15% total body weight loss, we anticipate completing randomization of these 315 participants to Revita versus sham in the first half of 2026 and anticipate reporting pivotal six-month primary endpoint data in the second half of 2026. Remember, we believe only a single pivotal study is required for approval for Revita in weight maintenance. Next, the REMAIN-1 Midpoint Cohort completed enrollment in Q4 2024, and we are confident in our ability to deliver the first blinded controlled data from these 45 participants with three months of follow-up in Q3 2025, a major catalyst that we believe will help validate Revita's potential for these patients in need. Now, turning to the Reveal-1 Cohort, in April, we shared encouraging initial results. Fifteen participants who had lost weight on GLP-1 drugs discontinued their GLP-1, underwent Revita, and entered structured diet and lifestyle support. For the participants who had one-month follow-up data at that time, average weight regain was just 1.2% compared to the approximately 3% typically seen after GLP-1 cessation. Two participants with three-month follow-up showed persistent weight loss through that follow-up period as well. In June, we expect to present an incremental update with three-month data from the Reveal-1 Cohort, providing what we believe is critical early validation of Revita's potential. When patients stopped tirzepatide, one would expect them to regain about 6% body weight by three months. So we will compare Reveal-1 Cohort results to that historical comparator. As you recall, for Revita, we have built a hub-and-spoke network across the United States with referring clinics, called spokes, sending patients to leading GI endoscopists at hub centers from Los Angeles to New Hampshire and Seattle to Miami. Looking ahead to potential approval and commercial launch, this broad and rapid enrollment in the Remain-1 study highlights the efficiency, scalability, and throughput of our commercial model. We anticipate that these centers, and others like them, will form the foundation of our first commercial wave, and we are energized by these early indicators of Revita's market potential, and the relationships that we have been building with physicians across the United States. As part of our commercial planning, we conducted in-depth market research with patients and other key stakeholders as well, and the findings were clear. Patients are highly motivated to find an off-ramp to GLP-1 therapy. The patient living with obesity does not want to stay on chronic pharmacotherapy to manage their condition for the rest of their life. Patients uniformly expressed strong interest in Revita. So what you can see is that we made a lot of progress in a short time with Revita in weight maintenance, and seeing our acceleration into an exciting and important new area of medicine called weight maintenance, where we are breaking ground in a substantial therapeutic category that has emerged because of the success that GLP-1s have with weight loss, but where they fall short with weight maintenance. Now turning to Rejuva, our pancreatic gene therapy platform that is designed to reprogram the pancreas itself to deliver durable metabolic control from within. We are building what we believe will be the best-in-class GLP-1-based therapy for obesity and metabolic disease. Potency, durability, tolerability, and convenience. Rejuva is designed to deliver smart, nutrient-responsive GLP-1 expression in the pancreas, enabling natural metabolic regulation without the burden of chronic injections, adherence challenges, or escalating costs. We believe Rejuva sets a new standard for how to leverage the known therapeutic benefits of nutrient-stimulated hormones for long-term control of metabolic disease. It was only in January of last year that we nominated RJVA-001 as our first clinical candidate, and demonstrated that our one-time pancreas-targeted smart GLP-1 gene therapy outperformed semaglutide in preclinical models of diabetes and obesity. Importantly, Rejuva doesn't just drive more weight loss, it seems to deliver better quality weight loss compared to semaglutide. Rejuva preserves lean mass while reducing fat mass, addressing one of the major challenges seen with high-dose GLP-1 therapy. By December, we demonstrated the precision of local pancreatic delivery in a large animal model, achieving strong, durable GLP-1 expression with a single, low-dose, and no safety signals observed. We also completed key in vivo CTA-enabling studies for RJVA-001 by the end of the year. Momentum continued into the first quarter of 2025 as we achieved regulatory alignment with European authorities on our planned first-in-human study design. This positions us for an exciting series of milestones ahead. This weekend at ASGCT, we look forward to sharing new, exciting data on RJVA-001 safety, efficacy, and potential tolerability based on our preclinical CTA-enabling studies. And then in June, we plan to submit our first CTA module to regulators, with additional filings following shortly thereafter. Pending regulatory authorization, we expect to dose our first patients with RJVA-001 and to report preliminary data in 2026. If successful, Rejuva could totally redefine the treatment paradigm for diabetes and obesity, delivering a first-in-class, programmable, and durable therapy at scale. Working with a leading CDMO in AAV manufacturing, we've developed a large-scale CGMP manufacturing process to support the size of the projected patient population that could be served by our Rejuva platform. We have completed AAV production runs in 500-liter bioreactors, demonstrating a strong foundation for scalable manufacturing with the potential for significant expansion, even from where we are now. What this means is that we see a pathway to drive COGS several orders of magnitude lower than current systemic gene therapy products. We believe this could be a huge win for patients and enable a cost structure designed for the broadest possible access to our therapies. We believe that for AAV-based therapies to succeed, they must be safe, effective, and commercially viable, and this is precisely why we're so excited about the Rejuva platform. With Revita and Rejuva both advancing rapidly, we're entering a catalyst-rich period of acceleration and key proof points in the months ahead for Fractyl, and we look forward to delivering transformative data within the next several months to you. With that, I'll turn the call over to Lisa for a financial update.

Thank you, Harith. In the first quarter of 2025, we continued to invest strategically in the clinical and operational progress you just heard about. Research and development expense was $19.4 million, compared to $14.4 million in the first quarter of 2024. This increase reflects continued advancement of our Remain-1 study, development of the Rejuva program, and personnel-related expenses. So, in general, an administrative expense was $5.3 million, compared to $7.1 million in the same period last year, primarily due to a reduction in stock-based compensation expenses, partially offset by increased costs associated with operating as a public company. We reported a net loss of $23.7 million, compared to a net loss of $3.3 million in Q1 2024. This was largely due to the fluctuation in the non-cash change in fair value of notes and warrants, and partially driven by increase in operating expenses. As of March 31st, 2025, Fractyl had approximately $42.1 million in cash and cash equivalent. Based on the projected costs of our clinical development plans and current enrollment trends, we believe our existing cash and cash equivalents will be sufficient to fund our operations into the fourth quarter of 2025. This update primarily reflects the accelerated pace of enrollment in our REMAIN-1 Pivotal study, combined with additional investments in RJVA-001 manufacturing scalability. Investments we believe are critical to advancing both the Revita and Rejuva platforms toward key value-creating milestones. Before I turn it back to Harith, I want to briefly address a topic that's come up in recent investor conversations, the potential impact of tariffs. As a development-stage company focused on R&D and clinical studies and regulatory planning, we don't believe current tariff policies could materially affect our business for the foreseeable future. While some of our lab supplies and device components are sourced internationally, any related cost exposure is currently minimal and does not impact our near-term financial guidance. We are monitoring policy developments closely and will reassess as we move closer to commercial launch. With that, I'll turn the call back over to Harith.

Thank you, Lisa. 2025 is shaping up to be a defining year for Fractyl, one where execution, breakthrough data, and regulatory progress come together to drive meaningful momentum. In the months ahead, we expect to deliver three major catalysts, incremental three-month data from the Reveal-1 Cohort in June, the first CTA module submission for RJVA-001 in June, and midpoint randomized data from the REMAIN-1 Midpoint Cohort in the third quarter. For the Reveal-1 Cohort, success means demonstrating stable weight maintenance without GLP-1 therapy. For the REMAIN-1 Midpoint Cohort, success means showing clear separation between Revita and sham. And for RJVA-001, success means earning authorization to initiate first-in-human studies. Each of these would represent a major validation of our platforms and our leadership position in metabolic care. We are so deeply grateful to the patients, physicians, employees, and investors who are supporting our mission to transform the future of metabolic disease treatment. We look forward to updating you as we execute on our upcoming key milestones. And I'd like to take a moment to recognize Dr. Tim Kieffer, our Chief Scientific Officer, for his leadership in advancing RJVA-001on its path to the clinic. As we transition Rejuva into its next chapter of clinical development, Tim will continue to support Fractyl as a scientific consultant, and we are grateful for his continued contributions in that regard. Operator, we're now ready to open the call for questions.

[Operator Instructions] Our first question comes from Jason Gerberry of Bank of America Securities.

Hey, this is Chi on for Jason. Thanks for taking our questions. Just a couple for me. Regarding the midpoint analysis of Remain-1, I understand you guys have reaffirmed the timeline on 3Q, but just curious if you have already randomized all the 45 patients, meaning that they have already achieved the minimal 15% weight loss with the GLP-1, such that I just want to get a sense of when we might get the midpoint analysis in 3Q. And the second question is, thanks for the color on what you see as a bar of success for the Remain-1 midpoint analysis, which you frame as a clear separation of sham versus Revita. I'm curious at the 12-week analysis, is there any sort of effect size delta that you're expecting to see between the sham and the Revita from the Remain-1 midpoint analysis? Thanks so much.

Thanks, Chi. Look forward to seeing you in Las Vegas at your conference in a couple of days. Let me reaffirm on the midpoint. Well over 45 patients have hit 15% total body weight loss, and so we feel like we are confident in our anticipation of that data set coming in Q3. And then with respect to the 12-week analysis on effect size, our goal is to demonstrate that we are at least 50% better than what you would expect to see from tirzepatide withdrawal, and we are sort of reaffirming that expectation as we sit here today. We're excited by what the Reveal-1 open label data just next month will show at three months as an early open label view towards that, and then just a short while later, the first randomized data for a weight maintenance therapeutic strategy. Thanks for your question.

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

Hey, good afternoon. It's Avi Novick on for Mike. Thank you for taking our questions, and congrats on all the progress. So I guess starting with the upcoming Reveal-1 update in June, will the three-month data be from all seven subjects who we had data for previously, and is there a possibility that we could see, I guess, perhaps earlier data from additional patients who have been enrolled in the study? So that's one, and then I guess on the Remain-1 midpoint analysis, could you remind us what mechanisms you had in place to limit a placebo effect? Thanks.

Sure. Great. So on question number one, the Reveal-1 update, we had reported that there were 15 patients who had enrolled as of the beginning of April when we made our last announcement. We expect that the majority of them will have hit their three-month follow-up by that time, and we will have incremental one-month data to share as well, and we look forward to sharing that in June. With respect to limiting variability and sham effect, this is a super important question, particularly in device-based procedural therapy studies. We keep a very close eye on all of the different variables that could be impacting the likelihood of sham effect. The biggest among those are patient behavior and adherence to the diet and lifestyle program in the post-procedure period, and one of the things that really helps us in that regard is having the ability to observe patients through their 15% weight loss journey on tirzepatide during that open-label run-in phase in order to confirm patient adherence and ability to follow procedures leading into the study. The second big thing that I would focus on is, bear in mind, this is the first significant pivotal study for weight maintenance after GLP-1 discontinuation, so I think we're leading the field here and defining how these things can be done, but one thing that differentiates Reveal from Remain is the relative homogeneity of the Remain-1 one patient population going into the randomization. And so, as you know, we are selecting patients in Remain who are obese, non-diabetic, GLP-1 drug-naive, and we are putting them on tirzepatide so they're all getting the same drug and we're titrating it as per protocol, and then once they hit 15% body weight loss, then we are randomizing them as close to that weight loss as possible. So we expect a tighter window of weight loss achieved at the time of randomization. As we know from the GLP-1 category, that gender can affect GLP-1s and glycemic status can affect the effect of GLP-1, so we'll be looking at all of those things and controlling for all of those things in our randomization, but those are the two big ones that I would focus on that we are clued into and monitoring very closely.

Our next question comes from Michael DiFiore of Evercore ISI.

Hey, guys. Thanks so much for taking my question and congrats on all the continued progress. A few from me. Just given all the shakeup at the FDA, CBER, and possibly on the device side, are there any concerns or potential red flags that you're seeing now that could undermine or slow down your regulatory submission process? And in terms of rejuvenation, it sounds like the boxes are still being checked on the EU regulatory front. Are there any more gating factors in the US for the CTA? And if so, what are they? And I have one follow-up.

Sure. So, with respect to the FDA shakeup, we are not seeing anything on Revita that could impact our regulatory interactions. We've had ongoing dialogue with the FDA on small matters and everything is proceeding normally. With respect to Rejuva, as you may recall, we took an o-US first-in-human strategy. We're planning to file in Europe and in Australia to do the first-in-human study in those geographies. And so, we don't feel like we're affected by near-term changes at CBER at all. With respect to your second question, RJVA-001, well, there's really nothing other than preparing all of the documentation necessary in order to file for both the device and for the drug and for the DMT lot release. And we're checking boxes on all of those fronts and submitting in a systematic way. We'll keep you updated on that in our next updates perforce, but we are on track for our submission coming up in the next several weeks here.

Got it. Excellent. And just my final question is simply, are there any developments for Rejuva's obesity construct that are worth mentioning?

Exciting stuff, but nothing worth mentioning, probably, yes.

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

Hey, guys. Congrats on all the progress. A few from me. So, on Remain-1, can you quantify or help us understand, I guess, how far ahead enrollment was relative to expectations? And was that driven by, like, more sites getting open than you thought, more demand at the individual sites? Any color you can give us on that?

Sure. Happy to. Roughly three months ahead of schedule. We saw that enrollment was proceeding more rapidly than we expected over the last couple of months. We had guided to full enrollment by summer. And, in fact, we, within the last several weeks, we had to cap our first sites because the demand to participate at those individual sites exceeded our capacity to be able to satisfy that demand. We thought that that would happen, that demand would sort of trickle after an initial bolus at sites. But actually, the demand just continued to develop. And so this is excess demand at a site level relative to our expectations. We actually ended up enrolling a smaller number of sites in the study than we had originally thought that we needed.

Got it. That's helpful. Okay. And then, can you remind us what the sham procedure looks like, what's involved there? And then, I guess, just a follow-up question on the kind of controlling placebo response question. Are you stratifying, based on some of the things that you said you're monitoring, are you stratifying patients based on kind of adherence during the 15% weight loss period or percent weight loss at the time of enrollment or any other metrics in that regard?

So, with respect to the sham procedure, everyone gets an upper endoscopy and everyone gets the catheter introduced into their intestine. And then, randomization occurs. And either there is a dwell time of that catheter within the duodenum in lieu of performing the procedure or the procedure is performed. And then, there is a script that physicians and the teams in the room have to follow after the procedure is complete in order to not unblind the patients. Then the physicians who manage those patients are not the ones who are in the room. And so the whole study team that is blinded does not know what happened within that room. And there's a Chinese wall set up that separates those two. So, that's the way in which the sham is protected. We feel like it's about as rigorous as you could possibly imagine the sham being. And we're proud of the rigor of that scientific evidence. And then the question that you asked me about randomization, we do have certain factors that we are stratifying on for randomization. It's only 45 subjects in the Remain-1 open label in the midpoint cohort. And so can't be stratifying on too many things. But the big ones are baseline BMI and gender are two top things that really will have the ability to impact weight regain. And so, those are ones that we focused on and how we thought about stratifying randomization.

Got it. Okay. And then, just one on Rejuva. Assuming all goes well with the CTA, how should we think about kind of timelines to get the study up and running and patients dose thereafter? And thinking in particular, I guess, about the training process for the administration procedure and how long will that take?

Well, we've guided to dosing the first patients and preliminary data in 2026. And we continue to feel very confident in that guidance. There's nothing more to be said about that right now. But of course, over the next several quarters, we will continue to give you more specifics on that. I'm excited that you asked me a question about the training process. The Rejuva procedure, we just came out of the DDW meeting, which is a GI meeting that's conducted annually. It was in San Diego. We had a clinical advisory board meeting there with several GI endoscopy experts. They love the Rejuva catheter that we have designed. And they believe that the procedure that we are asking them to conduct is right down the middle of the fairway of things that they already know how to do. We will be super rigorous about how we train them like we are with Revita, but we anticipate that this will be a very straightforward, although a very momentous first human case when we deliver gene therapy to the pancreas for the first time. The complexity will not be in delivering the needle into the pancreas. That is something they do all of the time and are super comfortable with.

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

Well, thank you very much, everyone. Thanks for joining us. As always, we appreciate your continued interest and support of Fractyl. Let's just end with how we started. There's an efficacy gap and a durability gap in obesity care today. And we are laser focused on trying to close those gaps. And we look forward to sharing our updates on our progress with Revita and Rejuva. Thanks so much.