Fractyl Health valued at $654.6 mln in tepid debut
02/02/2024 18:21
Feb 2 (Reuters) - Shares of Fractyl Health GUTS.O fell
8.3% on their market debut on Friday, giving the obesity and
diabetes drug developer a market capitalization of $654.6
million.
After a two-year lull, initial public offerings in the U.S.
are expected to rebound in 2024 on firming bets of a soft
landing for the world's largest economy. Investor reception to
fresh stocks, however, has been uneven.
Healthcare companies CG Oncology CGON.O and KKR-backed
BrightSpring Health Services BTSG.O made contrasting market
debuts on Nasdaq last week.
Fractyl, backed by investment company Mithril Capital and
venture capital firm General Catalyst, debuted at $13.75 per
share on the Nasdaq, below its offer price of $15 apiece. It
sold 7.3 million shares in its offering and raised $110 million.
The Lexington, Massachusetts-based company develops
"disease-modifying" therapies that target organ-level root
causes to treat metabolic diseases such as type-2 diabetes and
obesity.
The weight-loss drugs market is anticipated to reach $100
billion by the end of the decade.
Revita, a drug Fractyl is developing for type-2 diabetes, is
at an enrollment stage.
Its other therapy, Rejuva PGTx, at a preclinical stage, has
shown improvement in glycemic control, delayed diabetes
progression, and weight reduction compared to semaglutide, an
active ingredient in Novo Nordisk's NOVOb.CO Ozempic and
Wegovy.
BofA Securities, Morgan Stanley and Evercore ISI were the
underwriters of the offering.
(Reporting by Pritam Biswas in Bengaluru; Editing by Krishna
Chandra Eluri)
((Pritam.Biswas@thomsonreuters.com;))