A Lexington-based life sciences company is filing for an initial public offering, hoping to fund the development of its innovative diabetes and weight loss treatments.
Fractyl Health applied to trade on the Nasdaq on Dec. 14, under the proposed symbol “GUTS.” The company, headquartered at 17 Hartwell Ave., describes itself as a “metabolic therapeutics company,” and is focused on researching non-drug treatments for type 2 diabetes and obesity.
The filing comes on the back of increasing popularity and commercial success for weight loss drugs like Ozempic and Wagovy. Fractyl’s products also promote weight loss, but with a key difference — unlike Ozempic and Wagovy, which are administered weekly, Fractyl’s proposed treatment would only have to be administered once. That would address a major concern with other weight loss drugs. Studies have found that those who stop taking the weekly injections tend to regain the weight they lost after about a year.
Fractyl has not shared an estimated share price. In the filing, it noted that proceeds from the IPO will be used to complete clinical studies for its treatments.
Jay Caplan, Fractyl’s co-founder and president, declined to comment on the filing, citing the SEC-enforced “quiet period” before the company officially goes public.
The company’s flagship product, Revita, is an endoscopic procedure targeting the duodenum, the upper part of the small intestine, which regulates the response to food intake. By “resurfacing” the duodenum, it improves the body’s ability to send signals affecting satiety and glucose control.
By reducing insulin resistance and promoting healthier blood glucose levels, the non-surgical, outpatient procedure would help control appetite and alleviate weight gain.
A study published by the Endocrine Society in 2020 concluded that Revita “has the potential to transform the lives of patients who cannot adequately control their disease with drug therapies,” in the words of Dr. David Hopkins, director of the diabetes program at King’s Health Partners in London. Revita is already approved for type 2 diabetes patients in Germany, according to Fractyl’s filing.
Another Fractyl procedure, Rejuva, is a gene therapy that affects pancreatic hormones, promoting insulin production and weight loss. That treatment is currently being tested in pigs and mice, with approval for human trials expected this year, according to the Boston Globe.
“We believe Revita and Rejuva, if approved, have the potential to revolutionize treatment across the spectrum of [type 2 diabetes] and obesity,” the company stated in the filing.
However, the company acknowledged that it has “not completed any pivotal clinical studies,” and nor has it had any products approved for commercial sale in the United States.
The filing also noted that Fractyl has “incurred significant net losses since inception” – though this is not necessarily uncommon among biotech companies. Over the first three quarters of 2023, the company posted a net loss of approximately $58 million, according to the filing.
“We expect to continue to incur significant net losses for the foreseeable future and may never achieve or sustain profitability,” the company stated.
And while Revita earned “breakthrough device” designation from the Food and Drug Administration – a formal recognition of its potential to advance patient care – there is no timetable set for regulatory review and approval.
Nevertheless, Sandhya Iyer, director of economic planning for the Town of Lexington, said the filing is a sign that the local biotech scene is maturing.
“The more companies we have in Lexington going into an IPO… the more and more strength [there is] towards building a life sciences ecosystem that can be sustainable within Lexington,” she said.
Nineteen biotech companies went public last year, according to the Biopharma Dive online database. Of those, two were based in Massachusetts – Apogee Therapeutics, of Waltham, and Neumora Therapeutics, of Watertown.
“Once they receive the IPO, I think we’ll have a better understanding of where they stand [in the field of metabolic research] from a very different perspective,” Iyer added.
Fractyl was founded in 2010, and has been based in Lexington since 2016. It employs 88 full-time employees, 62 of them based in Lexington.