The IPO Buzz: Fractyl Health Targets Obesity & Diabetes in Plans for a $100 Million IPO

Less than 24 hours after the Fed signaled that it would cut rates in 2024, Fractyl Health (GUTS proposed) filed plans for a $100 million IPO. The metabolic therapeutics company is pioneering new approaches to treat obesity and Type 2 diabetes, according to its S-1 (prospectus) dated Dec. 14, 2023. Fractyl Health did not disclose terms for its IPO. The $100 million is a placeholder estimate of the IPO’s proceeds.

BofA Securities, Morgan Stanley and Evercore ISI are the joint book-runners.

The Federal Reserve’s pivot on Wednesday (Dec. 13, 2023) to rate cuts in 2024 drove the  Dow Jones industrial average above 37,000 for the first time.

“The Fed writes the script for Wall Street,” as IPOScoop founder John E. Fitzgibbon, Jr. often wrote.

Lower interest rates and a strong U.S. stock market provide the essential ingredients for a healthy IPO market. The Street expects that the IPO market will pick up its pace in 2024.

Fractyl Health, based in Lexington, Massachusetts, is developing two lead product candidates:

  • The Revita DMR System is “an outpatient procedural therapy designed to durably modify duodenal dysfunction, a major pathologic consequence of a high fat and high sugar diet, which can initiate T2D (Type 2 Diabetes) and obesity in humans,” the prospectus says.
  • Rejuva is a “novel locally administered adeno-associated virus, or AAV, delivered pancreatic gene therapy, or PGTx, platform. Rejuva is designed to enable long-term remission of T2D (Type 2 Diabetes) and obesity by durably altering metabolic hormone function in the pancreatic islet cells of patients.”

The biotech, founded in 2010, reported a net loss of $68.81 million on revenue of about $113,000 for the 12 months that ended on Sept. 30, 2023, according to financial statements in the prospectus.

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Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

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