Fractyl Health (Nasdaq:GUTS) is cutting nearly a fifth of its workforce as it streamlines resources and shifts focus toward certain therapies.
The company, which develops therapies and procedures for treating obesity and type 2 diabetes, said it plans to prioritize its REMAIN-1 pivotal study. This study addresses the demand for an off-ramp to GLP-1 therapies. Additionally, the company aims to advance its novel Rejuva gene therapy platform into first-in-human studies.
Burlington, Massachusetts–based Fractyl Health attributed this to positive initial feedback from its REVEAL-1 cohort, demand for participation in REMAIN-1 and strong patient and physician feedback on the urgent need for durable weight maintenance solutions.
As a result, Fractyl plans to pause investment in its Revita programs for type 2 diabetes to extend its cash runway through 2026. Revita, a diabetes reversal procedure, uses hydrothermal ablation to target the duodenum in conjunction with empagliflozin.
To streamline resources, Fractyl is enacting a 17% workforce reduction. As of March 2024, the company had 102 full-time employees, per its annual report. The layoffs could affect around 17 employees.
This move comes a year after the company completed an IPO.
“The real challenge in obesity is no longer losing weight, it is keeping the weight off. The strong response from patients and physicians to the REMAIN-1 study highlights the urgent need for durable weight maintenance solutions, and we are doubling down on our efforts in this space,” said Harith Rajagopalan, co-founder and CEO of Fractyl Health. “Revita is the first therapeutic candidate to receive Breakthrough Device designation for weight maintenance, and we are uniquely positioned to address this critical gap. By prioritizing REMAIN-1 and advancing our groundbreaking Rejuva gene therapy platform, we are channeling our resources toward what we believe are the most impactful and differentiated opportunities.
“We believe these strategic steps will enable us to execute on our mission of delivering truly transformative solutions for patients with obesity and metabolic disease.”
