Fractyl Health — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported a net loss of $14.2 million for the quarter ended September 30, 2026, compared to a net loss of $45.6 million for the same period in 2025.
• Research and development expenses were $12.5 million for the quarter, a decrease of $5.0 million from $17.5 million in the prior year period.
• Selling, general and administrative (SG&A) expenses were $6.2 million for the quarter, an increase of $1.0 million from $5.2 million in the prior year period.
• Adjusted EBITDA was negative $16.0 million for the quarter, improving from negative $20.8 million in the same period in 2025.
• Cash and cash equivalents totaled $31.5 million as of September 30, 2026, down from $81.5 million as of December 31, 2025.
• Total liabilities were $79.1 million as of September 30, 2026, compared to $111.9 million as of December 31, 2025.
• Notes payable, long-term, stood at $29.2 million as of September 30, 2026, compared to $30.6 million as of December 31, 2025.
• Net loss per share (basic and diluted) was $1.07 for the quarter, compared to $8.46 in the prior year period.

Guidance and Future Outlook:

• The Company anticipates a planned FDA De Novo submission for Revita in late Q4 2026.
• Topline 12-month data from the REMAIN-1 Pivotal Cohort is anticipated in Q1 2027.
• Cash runway is expected to extend into Q2 2027, covering the period through the De Novo submission and anticipated 12-month pivotal data.
• Quarterly operating cash spending is expected to be reduced by approximately 50% to approximately $8 million by the end of Q2 2027.
• Potential FDA marketing authorization is anticipated in late 2027.
• A potential U.S. commercial launch is targeted for early 2028.

Business Segments and Product Lines:

• The REMAIN-1 Pivotal Cohort met its six-month co-primary endpoint with high statistical significance (p=0.0023).
• Revita participants retained approximately 80% of GLP-1-induced weight loss versus 67% for the sham group at six months.
• 32% of Revita participants were weight stable or had further weight loss at six months post-GLP-1 discontinuation, compared to 18% for sham.
• A dose-dependent effect was observed: participants receiving 12 to 18 cm of duodenal ablation had 43% less regain than sham, while those receiving 20 cm or more had 53% less regain.
• The Company is discontinuing internal development of the Rejuva gene therapy program and is seeking strategic alternatives for the asset.
• The Company adopted a plan to sharpen strategic focus on Revita, concentrating financial and operational resources on advancing the program toward FDA marketing authorization.

Market and Competitive Landscape:

• The Company estimates approximately 1 million Americans discontinue GLP-1s each month, creating a market opportunity for post-GLP-1 weight maintenance.
• The American Medical Association published Category III CPT code 1122T for the Revita procedure, effective January 1, 2027.
• The Centers for Medicare & Medicaid Services (CMS) proposed the RAPID pathway to align Medicare coverage with FDA authorization for breakthrough devices; Fractyl expects to learn of CMS adoption in early January 2027.
• Market research indicated that 33% of nearly 300 current or recent GLP-1 users preferred stopping GLP-1 therapy and receiving a hypothetical endoscopic procedure.
• The commercial launch plan targets the top 100 to 200 of approximately 1,000 accredited bariatric centers in the U.S., beginning with 30 to 50 centers in the first year.
• The U.S. Patent and Trademark Office issued U.S. Patent No. 12,740,821 covering features of the Revita single-use catheter, with a term extending to November 28, 2042.

Risks and Challenges:

• The Company faces the risk that the FDA may not accept a De Novo marketing application submission or may not grant marketing authorization for the Revita DMR System.
• There is no assurance that the review of strategic alternatives for Rejuva will result in any transaction.
• Final pathway determinations by the FDA will be made following review of the complete safety dataset.
• The Company must comply with the minimum liquidity covenant under its credit agreement.
• Actual results may differ from forward-looking statements due to known and unknown risks, uncertainties, and other important factors.

Management Commentary and Tone:

• CEO Harith Rajagopalan described the positive pivotal results from REMAIN-1 as a "defining moment" for Fractyl.
• Management stated the capital on hand is sufficient to fund the planned De Novo submission and upcoming 12-month pivotal data.
• The Company aims to establish a new therapeutic category of post-GLP-1 weight maintenance by reversing diet-induced damage to the gut.
• Management highlighted that the treatment effect grew over time, with the difference in weight regain between Revita and sham nearly doubling from Month 3 to Month 6.
• Interim safety data showed no device- or procedure-related serious adverse events, no deaths, and no unanticipated adverse device effects.

Other Key Points:

• The Company announced a workforce reduction of approximately 45%, with an estimated $2 million in severance and termination-related costs to be incurred primarily in Q4 2026.
• Michael Wartell was appointed as an independent director effective November 2, 2026, increasing the Board size from nine to ten members.
• A 1-for-12 reverse stock split was effected on October 2, 2026, with share and per share information retroactively adjusted.
• The Company hosted a Commercial Investor Day in September 2026 outlining the path to commercializing Revita.
• Fractyl's intellectual property portfolio includes 39 granted U.S. patents, approximately 40 pending U.S. applications, and more than 50 issued patents outside the United States.