Fractyl Health, Inc.

Good afternoon, and welcome to Fractal Health's second quarter 2025 financial results and business updates call. As a reminder, this conference call is being recorded. At this time, all participants are in listen-only mode. There will be a Q&A session following management prepared remarks. I'll now turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractal. Brian, you may now begin.

Thank you. This afternoon, we issued a press release that outlines the topics we plan to discuss today. This release is available at www.fractal.com under the Investors tab. Joining us on the call today are Dr. Harith Rajagopalan, Chief Executive Officer, and Lisa Davidson, Chief Financial Officer. During this call, we make forward-looking statements which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC file, including the quarterly report on Form 10-Q filed today, which I encourage you to review. Any forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements, even if subsequent events cause the company's views to change. It is now my pleasure to pass the call over to Haritha.

Thank you, Brian. Good afternoon, everyone. Fraxel is tackling the next major crisis in metabolic care, weight regain after GLP-1 discontinuation. Tens of millions of people are struggling with their weight and will start a GLP-1 with the hope of achieving lasting weight loss. But most will stop the drug within a year. Nearly all will regain weight. This rebound problem is a massive unmet need because most patients cannot stay on drug therapy for weight loss for the rest of their lives. And when they stop drug therapy, not only does their weight come back, but so too does their profound hunger and all of the metabolic complications associated with obesity, including type two diabetes. Fractal Health may be the first company with a scalable solution to this problem because our therapies target the root cause of disease for the very first time. Since our last earnings call, we have strengthened our balance sheet, further sharpened our strategic focus, and delivered on critical milestones. This focused execution sets us up for a transformational second half of the year. Last week, we strengthened our financial position through a $23 million underwritten public offering of common stock with accompanying warrants that could provide up to a total of $69 million in proceeds. This financing was led by leading healthcare investors, including Nantahala Capital, 8R1 Capital Management, Second Line Capital, 683, and Silver Arc, investors who understand the significance of our upcoming catalysts and chose to scale their investments alongside them. With this capital structure in place, we've positioned ourselves to fully capture the value of our clinical and strategic progress in the months ahead. With the proceeds from this primary capital raise, we expect to extend our cash runway through important Remain One midpoint cohort milestones with next month's three-month randomized data readout, as well as the six-month randomized data from this cohort in the first quarter of 2026. We sharpened our strategic focus by reducing our burn rate from 25.4 million in Q1 to $19.8 million in Q2 as we wound down our spend on non-critical programs following the strategic reprioritization earlier in the year. Going forward, we will continue to see reduced cash burn be a key area of focus with disciplined cash management through the Remain One Pivotal Study milestones ahead. We have also delivered on key milestones across our Revita and Rejuva programs during this Revita is emerging as a foundational therapy to reset the body's metabolic set point in obesity and type 2 diabetes. Last week, we reported new data from our German real-world registry study that reinforced Revita's durability, showing up to two years of benefit in weight maintenance and blood sugar control following a single treatment. What is impressive about the new data from Germany is not only the duration of effective up to two years, but also the potency of the therapy over that period of time, with even greater improvements in body weight at two years than at one year. What this implies is that Revita can deliver real-world results that could get even better over time as the body accommodates to a more physiologic and healthy relationship with food. These long-term outcomes are consistent with prior Revita clinical studies and solidify its potential as a real-world, non-pharmacologic solution for sustained metabolic results with a broad set of potential indications in obesity and metabolic disease. Our near-term focus is solving weight regain after GLP-1 discontinuation, a challenge that is now recognized by patients, physicians, and payers alike. In June, we shared positive three-month open-label data from the REVEAL-1 cohort. Patients who stopped terzepatide and received a single Revita procedure demonstrated weight stability at three months, with nearly half losing even more weight after stopping the drug. This is the first human clinical evidence that Revita may stabilize weight after stopping GLP-1s. Enrollment of our Remain-1 Pivotal Study is complete, and randomizations are on track. We continue to see a favorable safety profile and strong procedural consistency across sites, important indicators for study success and potential commercial scale. Next month, we expect to report three-month randomized data from the Remain One midpoint cohort. These are people with obesity but without type 2 diabetes who have lost 15% of their total body weight with terzapatide before randomization to Revita or Sham. This will be the first blinded controlled data set assessing whether Revita can preserve GLP-1-induced weight loss and metabolic benefit. The goal of the Remain One midpoint cohort will be to establish an early efficacy signal for Revita in a rigorous sham-controlled study ahead of our pivotal cohort for which top-line data are expected in the second half of next year. We believe this randomized midpoint data in September will be a key proof point for the therapy and we are optimistic for a positive outcome. For the Remain One midpoint cohort readout, including the three-month readout next month, success means showing clear separation between Revita and sham on weight regain over time. More specifically, we are aiming to show that Revita performs at least 50% better than what one would expect from triseptide withdrawal alone. Based on Sermon 4 data from Eli Lilly, patients who discontinued terzepatide typically regain 5% to 6% of their body weight by three months. If Revita-treated patients show only 3% weight regain or less at this same time point, that would not only be statistically significant, it would also be a highly meaningful result for patients, for physicians, and for payers. To put this in context, We shared three month data from our open label revealed one study in June where the median weight regain was less than a half a percentage point or just one pound of weight change compared to the five to 6% body weight or 10 to 15 pounds of weight regain typically seen by this time point when patients stopped triseptide. That early signal of weight loss maintenance was incredibly encouraging. And we believe it bodes very well and sets a strong precedent heading into the next month randomized readout from Remain One. Success with Remain One could position Revita as the LASIK for obesity, a straightforward one-time intervention that targets a root cause of disease and offers a potential for a lasting alternative to chronic disease management. This is not just theoretical. Our recent field visits to clinical trial sites and multiple advisory boards have confirmed three key themes. First, GI physicians are incredibly excited about Revita and believe it can be a valuable tool in their armamentarium as they increasingly move into treating obesity and metabolic disease. Second, based on the rapidity of enrollment in Remain One and the enthusiasm they see from patients, GI physicians anticipate significant procedure volumes upon potential FDA approval. And third, GLP-1 prescribers know that most of their patients do not want to be on these drugs for the rest of their lives, either because of side effects, costs, or concerns about long-term drug therapy. And with these insights in mind, we are building the foundation for commercial scale. In June, we announced a non-binding letter of intent with Barriendo, a nationwide endoscopic obesity care platform, to prepare for potential adoption of Revita pending FDA approval. This collaboration could help create a ready-made distribution channel across high-volume ambulatory and hospital endoscopy centers. The collaboration will focus on pre-commercial preparation, including workflow design, provider education, health economic analysis, and the development of referral pathways. As we pioneer new therapeutic areas in metabolic medicine, we are also establishing a leadership position that is built to last. In June, we were granted two new US patents reinforcing our foundational innovations in duodenal mucosal resurfacing. Today, our portfolio includes over 100 granted patents throughout the world, including 32 granted US patents and nearly 40 pending applications, making Fractal the clear innovation leader in gut-targeted metabolic therapy. Let me now turn to Rejuva. With Rejuva, we believe we've created a truly breakthrough therapy. the first potentially one-and-done smart GLP-1 platform designed to program pancreatic beta cells to secrete GLP-1 in response to nutrients, potentially delivering durable physiologic metabolic control at far lower circulating GLP-1 levels than required by injectable therapies. Rejuva001 has completed preclinical efficacy, toxicity, and biodistribution studies, CMC manufacturing is progressing well and nearly complete. We reached agreement with regulators on the design of the Rejuva-001 Phase 1-2 clinical study. It will be an open-label, multi-center study that will evaluate the safety, tolerability, and preliminary efficacy of Rejuva-001 in adults with inadequately controlled type 2 diabetes despite multiple glucose-lowering agents. In May, we submitted the first module of our clinical trial application. pending regulatory clearance, we expect to dose first patients and report preliminary data in 2026. Rejuva-001 could redefine the risk-benefit profile of long-term GLP-1 therapy and open the door to a durable, potentially curative solution for chronic metabolic disease. We believe that the future of metabolic care lies in durability, in physiologic design, and in root cause solutions that work in the real world. With Revita, we aim to be the LASIK for obesity. With Rejuva, we are reprogramming the pancreas itself for life. Our execution is tight, our focus is clear, and our opportunity is substantial. Lisa will now walk through the financials.