With the gold rush in obesity meds showing no sign of abating, Fractyl Health is gearing up to go public as it gathers preclinical evidence that its GLP-1 gene therapy could take on Novo Nordisk’s Wegovy.
The Lexington, Mass.-based biotech has been working on Rejuva, a GLP-1-based pancreatic gene therapy candidate designed to “provide long-term metabolic benefits” from a single dose, according to the company. Fractyl has been reading out data from preclinical studies in mice in recent months that appear to show the therapy can outperform semaglutide—marketed by Novo Nordisk as Wegovy to treat obesity.
In October, the company presented data showing that a single dose of Rejuva was able to reduce body fat by about 25% in a mouse model of type 2 diabetes, compared to roughly 18% in animals that were given daily doses of semaglutide.
Rejuva works by using an inactive adeno-associated virus to deliver a gene that stimulates GLP-1 expression in pancreas cells, leading to insulin release. While semaglutide is given through subcutaneous injections, Rejuva is designed to go directly to the pancreas via an infusion, though the mice in the October study received intraperitoneal injections. The mode of delivery and the design of the gene therapy restrict it to the pancreas, reducing the potential for off-target effects, according to Fractyl.
The biotech is currently working on lead optimization and IND-enabling toxicology studies and is targeting 2024 for its first human studies.
While Rejuva is likely to attract investors' attention due to the current GLP-1 hype, Fractyl has another treatment in its armory that is already available in Germany, albeit with a very different approach. Revita is an endoscopic procedure that blasts away thickened areas of the duodenal lining in the small intestine to improve the organ’s function, addressing what may be a root cause of type 2 diabetes.
“We believe Revita and Rejuva, if approved, have the potential to revolutionize treatment across the spectrum of type 2 diabetes and obesity, align the clinical and economic interests of key stakeholders around the long-term regression of metabolic disease and, at their fullest potential, significantly reduce the burden of metabolic disease globally,” the company said in its Nov. 14 SEC filing.
While the company has not yet set out an estimated share price or how much money it hopes to bring in from the Nasdaq listing, it said it would use the proceeds to complete a 1,000-person study of Revita to back up a planned U.S. approval application, as well as fund the continued preclinical development of Rejuva.
The biotech’s most recent funding infusion was a $100 million series F round back in June 2021. The financing came off the back of securing a breakthrough device tag from the FDA for Revita, with Fractyl stating at the time the proceeds would be used to support multiple late-stage trials in metabolic disease.
Very few biotechs braved the icy IPO market this year, with Acelyrin’s $540 million offering in May and RayzeBio’s $311 million effort in September proving two of the larger hauls.
However, in an analysis this week, PwC predicted that the IPO window would “gradually reopen” next year. The report also gave another clue as to why Fractyl might be confident, with analysts suggesting the “renaissance” in weight loss and cardiovascular drugs is likely to feed through to a “heightened focus” on these areas by investors and dealmakers.