Fractyl Health reported positive six-month trial results of its weight maintenance procedure last week, but shares nosedived 62.7% immediately following the announcement. The stock is currently trading at $1.15 down from $4.16 on October 15, the day before the announcement. Although the study met its primary clinical endpoint, results were still below analyst expectations. On Thursday, the company announced that it was laying off 45% of its workforce.
Fractyl Health, headquartered in Burlington, Massachusetts, is a clinical-stage metabolic therapeutics company. It is currently developing Revita, an endoscopic procedural therapy which remodels the lining of the duodenum. By doing so, it can help stem weight regain in patients who have stopped taking GLP-1 drugs
The company’s REMAIN-1 study was randomized, double-blind, and sham-controlled. It included 308 U.S. adults with obesity who stopped GLP-1 therapy after losing at least 15% of their body weight with the GLP-1 medication tirzepatide. According to the company’s October 16 announcement, participants who received the Revita procedure regained an average of 5.1% of their body weight, compared to others who underwent a sham procedure and gained back more — 8.2% of their body weight.
Despite the positive six-month findings, the stock’s sharp decline highlighted a contrast between the clinical findings and the market response. At least one stockwatcher on the company’s Yahoo Finance page seemed taken aback.
“Wow … dropped by half with seemingly great data news. When does it end for this company?”, wrote one commenter.
“No one can predict or control the market,” said Dr. Harith Rajagopalan, Fractyl Health’s CEO and co-founder in an email. “Our focus remains on the clinical results and what they mean for the future of Revita. REMAIN-1 met its prespecified six-month co-primary endpoint with strong statistical significance, providing important evidence supporting Revita’s potential to help patients maintain weight loss after stopping GLP-1 therapy. We’re encouraged by these findings and remain focused on advancing the program toward our upcoming clinical and regulatory milestones.”
The REMAIN-1 study met its six-month co-primary endpoint, defined by the company as “… a single Revita procedure preserving approximately 80% of GLP-1-induced weight loss after patients stopped therapy, compared with 67% for sham.”
The Revita procedure was designed to meet a growing challenge in obesity care: maintaining weight loss after the discontinuation of GLP-1 medications.
In January, MedCity News examined Fractyl Health’s potential role in addressing the post-GLP-1 weight gain, including the experiences of people seeking alternatives to long-term medication. In that interview, Rajagopalan said that the first section of the small intestine may be impacted by a lifetime of poor dietary habits. Those changes may lead to difficulty maintaining healthy weight and blood sugar levels. Now, by remodeling the duodenum, the Revita procedure aims to correct those challenges.
“Revita is not a competitor to GLP-1s,” said Rajagopalan. “It is designed to help lock in the remarkable gains they deliver. Patients stop these drugs for reasons that don’t go away as the drugs improve: cost, weekly injections, side effects that scale with dose, and a desire not to be on medication indefinitely. Better and more convenient medicines mean more people reach meaningful weight loss, which means more people asking how to keep it. That is the population Revita is for.”
The company also reported that Revita was well tolerated, with no serious adverse effects observed. The procedure remains investigational in the U.S. According to Rajagopalan, Revita holds Breakthrough Device Designation, with a De Novo submission planned for late this year.
“The 12-month data, expected in the first quarter of 2027, are the next test,” Rajagopalan said.
Rajagopalan and the company have a lot of convincing to do. On Thursday, in addition to announcing layoffs, the company noted that it will discontinue its Rejuva gene therapy program and implied it is likely seeking buyers for it. Fractyl has been casting about for a winning formula ever since it went public in 2024. Initially, the company was focused on reversing Type 2 diabetes and had even launched a study. That was paused in January 2025.
One Wall Street analyst from Craig-Hallum lowered Fractyl’s stock price target to $5 from $48 following the release of the data. While the REMAIN-1 study showed significant six-month data on the top line, the placebo-adjusted results came in below expectations.
Photo: champc, Getty Images
Arundhati Parmar contributed to this story
