Good day, everybody. We're gonna get going here at the BofA Annual Healthcare Conference and our last company presentation with Fractyl Health. My name is Jason Gerberry. I cover pharma and biotech here at BofA, and we're joined by Harith Rajagopalan, Co-Founder, CEO, and Lara Smith Weber, CFO. Thank you both for joining us here at the conference. Glad to be here. Thanks. Thank you. Maybe just get things started with a little bit about Revita, your lead program, and a little bit of the why, if you will. You know, what you're looking to solve for, how you're looking to improve upon outcomes for individuals with obesity. Sure. Revita is a duodenal mucosal resurfacing. It's a catheter-based technology to ablate the duodenal dysfunction that we believe is a root cause of obesity and type 2 diabetes. 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. Most people stop taking these medicines within the first year of therapy. The more weight they lose, the more rapidly they regain their weight, whatever metabolic benefits that they had go away as their weight comes back. There is a deep, urgent need for a durable weight maintenance solution. I think you kinda saw from Eli Lilly's data this week in the European Congress on Obesity that their approach at 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. Yeah. In the U.S., it's probably something like five to seven 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? five to seven million was probably Well, maybe the right number if you account for all of the churn. The most recent stats are a million people are stopping a GLP-1 each month in the U.S. Interesting number. One million people are stopping each month. Yeah. I mean, that just goes to show, like, that's for a variety of different reasons. Obviously, cost and access, side effects, but increasingly recognizes the idea that people just don't wanna 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. 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 the 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 six months, even if you take cost off the table entirely. 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. Yeah. They just add to the churn and friction of the ongoing management. Yep. 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 gonna 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. You've made analogy, I think, to LASIK. Yeah. I think it's an interesting analog because LASIK's very effective. It can be done relatively quick, in a non-invasive way, and it works really well, right? Yeah. Maybe how do you think about, you know, 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, you know, gained traction, you know, with the masses. I imagine in the early phases like, "Oh, wow, I'm not gonna let somebody do this with my eyes. Like, I don't wanna be the early, you know, guinea pig," right? Versus, you know, after a few years it's being done, people see how well it works, what high rates of lack of safety issues emerge that then it sort of catches momentum. Just thinking about it as a commercial analog. Yeah. I think that there is some aspect of, well, you know, asking what is the tipping point, you know? Yeah, 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, the time point of discontinuation is an acute moment of need for that patient, for which there is no alternative today. It is very much like LASIK in that it is a one-time procedure that we believe will have long-lasting effects and can rid the burden of ongoing management. 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. Yeah. Okay. That's what creates an extraordinary opportunity that I think is gonna be highly attractive to patients right out of the gate. Okay. You have one-year data REVEAL-1, I believe 2Q. You have REMAIN-1 midpoint cohort 3Q. Maybe just talk about the clinically meaningful threshold here. Yeah. What's a great outcome for you? Three major catalysts from our weight maintenance program over the next six months. An open label cohort REVEAL-1 will have the first 12-month data. These patients lost over 20% of their body weight on a GLP-1. All of the data that we see suggests that they will have regained about 15% total body weight by one year, cutting that by more than half. Less than 7.5% weight regain at one year, we think would be a phenomenal result. Turning to the REMAIN-1 midpoint data, that's our 1st randomized sort of phase II equivalent study. 45 patients, two to one Revita versus sham. We will see 12-month data in our Q3. There too, we would expect 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 control study. Those two, I think, are good setups for the pivotal trial, which is fully randomized and has shown an excellent blinded safety profile, and we will expect to see that six-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. Yeah. Can you just remind us the regulatory bar versus the commercial bar? Sure, yeah. 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. Yep. Okay. Maybe talk a little bit about how Revita impacts the patient's metabolic profile, how important those parameters are when you know, ultimately provide more detailed data in subsequent updates. In our REVEAL-1 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. 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. I think that the totality of the clinical evidence that we've seen so far suggests that Revita has like 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. Yeah. Okay. You know, durability, I imagine is gonna be an important part of the story, that'll take time to evolve. As you sit here today and if you're able to show what you aim to show at like 12 month, 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? Maybe part of it is like what's commercially viable too, right? How often are people gonna wanna redo the procedures? I think one year durability is like the sort of the minimum bar threshold for durability. standpoint. We've seen in type 2 diabetes two plus years of durable efficacy. I don't, 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. As you say, we're gonna have to see what that looks like. We will be looking at weight trajectories as some indication of what that durability profile looks like. From six to nine 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. It's quite clear now that people 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 18-20 months. You see that over and over again from Lilly and SURMOUNT and Novo data that 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 pre-drug weight set point. Our hope and our expectation is that Revita will durably 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. It will take time for that to get elaborated. Yeah. Okay. Then when we look ahead to 4Q in 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. We think the sort of the constellation 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 lengths 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. We will be presenting data not only on that primary endpoint, but also those key secondary endpoints for which we have pre-specified like alpha spending criteria in order to be able to give a, what we think will be a differentiated and compelling and complete clinical profile by that early Q4 data. Okay. Then maybe just talking about the procedure and the dose response and greater ablation length and, you know, what aspect of weight maintenance do you think this greater ablation would lead to? Yeah. You know, greater response rate, deeper response rate, and or just durable response. I mean, let's just start with what we know in the field. Semaglutide 1 mg to 2 mg is sort of peaking the efficacy on glucose lowering, but 1.5 to 2.4 mg is where you're beginning to see its effects on weight. 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 a type 2 diabetes trial, we saw that 10 cm of duodenal mucosal ablation was more effective at glucose lowering than less than 5 cm of ablation. What we're seeing in our first sham controlled study in weight maintenance is that patients who get more than 14 cm of ablation have better protection from weight regain than people who get less than that. 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-1. Can you just remind the listeners just in terms of the greater ablation length, how the trialists are gonna be, you know, incorporating that in and the data that we get. Yeah. How that'll be split between greater ablation length versus shorter ablation length? Our per-protocol analysis, which is a pre-specified key secondary endpoint, will be in those individuals who get more than 14 centimeters of ablation versus those who got, you know, versus sham. What we have advised physicians And we just came out of the Digestive Disease Week meeting where we talked about what we're 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. 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. 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. Yeah. I imagine, would you envision that the longer ablation length, based on what you know today, is probably gonna 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. How would you frame the any safety risks unknowns with the 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. Right. 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 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, you know, when implemented in the trial? Yeah, we've always said all along it takes about four to five procedures for a physician to learn how to do this well. 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 monitored how long the procedures were taking, what length of ablation they achieved as a function of the number of procedures they had done, and we reaffirmed that four to five procedure number as being completely accurate. We got every physician to be able to perform adequate lengths of ablation within that envelope. Okay. You talked a little bit about the protocol violation leading to some data variability in the midpoint data. Yeah, yeah. 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 got a good handle on the sources of that heterogeneity. We explained in our March earnings call, what we found. We have two additional opportunities to reassure investors on those questions from the REVEAL-1 data coming up at 12 months and the REMAIN-1 midpoint data coming up at 12 months. We like what we're seeing. We feel very confident that it's behind us. Okay. Coming back to the one-year midpoint data in 3Q, you know, the expectation, around robustness of that versus the pivotal cohort at a similar time point and, you know, just given that what we've discussed about ablation length and any protocol deviations? I would expect that the REMAIN-1 midpoint at 12 months is gonna 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 six and now nine months of follow-up. What we are seeing suggests to us it's gonna give you very good visibility into what you'd expect to see from the pivotal. Okay. maybe, you know, with respect to, like, the type of clinical trials that pharmacotherapies are conducting, and then you think about the de novo pathway. How physicians will view the robustness of that, thinking more about commercial implication here, right? Yeah. You know, I guess, do you think that physicians are gonna have any differing view on the robustness of that type of data package versus, say, an RCT type of data set that you see from, like, a pharmacotherapy? We have an RCT data set coming. You know, this is a robust level one prospective randomized double-blinded sham controlled pre-specified 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." 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 an X, Y axis, the risk essentially drops to near zero within seven to 14 days. 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. You know, 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 U.S. 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. 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 three positive contribution margin to a hospital's bottom line. 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, you know, time commitment, right? Like, and what they may need to make a trade-off on? 'Cause I imagine they don't, they're not sitting with extra time, right? There's probably a trade-off with something to work this into their workflows. Correct. 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 the sort of capacity than they have the procedures to fill it with. 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. Yeah. 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. That is, like, very clearly how this would roll out. Yep. As we think about this ecosystem of treatment, you know, 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. What I wonder are I'd imagine these endoscopists aren't driving a lot of that volume, right? To say, "Hey, maybe patient XYZ, you should consider that." There probably needs to be some awareness build, right, for the masses around Revita. 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. If 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. 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. Yeah. 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, 'Cause Lilly, when Lilly was studying Foundayo, even did the Attain Maintain trial, right? As a quote-unquote, "off-ramp for injectable." And the patients who went from, Sema generally, like, maintained most of their weight reduction, right? I'm just kinda curious, do those dynamics and principles still hold in your mind with the rollout of oral therapies and how that'll 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 wanna stay on their medicine, or they wanna get off their medicine altogether. They're not really interested in switching to a different medicine. 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. 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. 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 wanna 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 wanna 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 where I'm gonna be keeping my needles and my syringes when I travel between point A and point B." 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 as, 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. Then maybe, you know, we have about a minute left here. Yeah. Rejuva, some updates there. Maybe if you can just talk about what are the, you know, as you see the upcoming milestones for Rejuva, you know, 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'll be able to potentially dose first patients pending site activation and then begin to see preliminary data in the back half of 2026. What you will expect to hear from us on this as you go forward through the year is that the first patients getting enrolled and then the first patients getting treated. Within one or two weeks, we're gonna have a signal on safety, feasibility, and tolerability, key initial questions. At around eight 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, and we'll obviously let people know. Once we start to begin to roll out the PD, we're gonna keep wondering, what is the dose that allows us to get a substantial plurality of patients to potential remission? If we have that would be the trigger to move on to larger studies. Okay. Then Lara, just quickly, cash runway and strategies to extend. 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 Rajagopalan talked about in Q4, as well as a potential de novo filing. I feel like we're very well funded, and we'll have about five to six months on hand at that time, and we're looking into different options to have some optionality to do that, whatever that next funding event may be at that time. All right. Great. Thank you both for joining us. Thank you. Appreciate it. Thank you. All right. Great. Thank you.