Fractyl Health stock initiated with Buy rating at H.C. Wainwright

Investing.com - H.C. Wainwright initiated coverage on Fractyl Health Inc (NASDAQ:GUTS) with a Buy rating and a $9.00 price target on Monday. The stock, currently trading at $1.02, has shown resilience with a nearly 10% gain over the past week, despite trading well below its 52-week high of $3.48.

The firm views Fractyl as developing transformative approaches for long-term remission of obesity and Type 2 diabetes (T2D), targeting the gut and pancreas as root-cause organs of metabolic diseases. With a market capitalization of $73.64 million, this emerging biotech player has garnered strong analyst support, maintaining a bullish consensus rating of 1.2 out of 5 (with 1 being the most bullish).

Fractyl’s lead asset is the Revita Duodenal Mucosal Resurfacing System, an outpatient endoscopic therapy designed to restore duodenal function and support weight maintenance in patients discontinuing GLP-1 therapy, currently being evaluated in the pivotal REMAIN-1 trial with three-month randomized data expected in third quarter 2025.

The company is also developing RJVA-001, a preclinical pancreatic gene therapy from its Rejuva platform, which delivers an adeno-associated virus GLP-1 transgene designed to enable durable remission of T2D by altering hormone function of pancreatic islets.

According to H.C. Wainwright, both Revita and Rejuva have demonstrated sustained weight loss and glucose control efficacy with favorable safety profiles after a single procedure or administration, potentially shifting treatment from chronic management to one-time physiologic alternatives. InvestingPro analysis indicates the company faces near-term challenges with cash burn, though this is typical for early-stage biotech companies. For deeper insights into Fractyl’s financial health and growth prospects, discover 11 additional exclusive ProTips available on InvestingPro.

In other recent news, Fractyl Health reported its second-quarter 2025 earnings, highlighting a notable increase in research and development expenses, which contributed to a wider net loss compared to the previous year. Despite the financial challenges, the company has successfully extended its cash runway into 2026. Canaccord Genuity responded to these developments by lowering its price target for Fractyl Health from $12 to $6, while maintaining a Buy rating, indicating that key timelines for the company’s clinical programs remain intact. Additionally, Fractyl Health announced changes to its board of directors, appointing Christopher Thompson, M.D., as a Class I director and Ian Sheffield as a Class II director. Sheffield will also join the board’s audit committee, receiving additional compensation for this role. Both new directors will participate in the Non-Employee Director Compensation Program, with options to purchase shares of the company’s common stock. These recent developments reflect Fractyl Health’s ongoing strategic and financial adjustments.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.