Fractyl Health, Inc. (GUTS) Earnings Call Transcript

Good morning, everyone, and welcome to the Fractyl Health data call on the top line results from the pivotal cohort of REMAIN-1. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Fractyl Health website following the conclusion of the event. I'd now like to turn the call over to Brian Luque, Head of Investor Relations and Corporate Development at Fractyl Health. Please go ahead, Brian.

Thanks, Tara. Good morning, everyone, and thank you for joining us. I'm Brian Luque, Head of Investor Relations and Corporate Development at Fractyl Health. Today, we will review the positive 6-month top line results from the ongoing REMAIN-1 pivotal study of Revita in post GLP-1 weight maintenance. Dr. Harith Rajagopalan, our Co-Founder and CEO, will discuss what these findings been for patients, the remaining 12-month assessment and how the results advance the regulatory and commercial strategy we outlined on our September 1 Investor Day. We will take questions after the prepared remarks. First, let me please turn to the legal disclaimer. During this presentation, we will be making forward-looking statements about future clinical results regulatory submissions and authorizations, reimbursement, commercial launch, potential treatment populations and for future catheter sales and other business opportunities. These statements reflect current expectations and involve risks and uncertainties that could cause actual outcomes to differ materially. Please review the disclosures in this presentation and the risk factors in our SEC filings. We undertake no obligation to update these statements, except as required by law. Revita remains investigational in the United States. The study is ongoing, and the top line data remain subject to final validation. 12-month co-primary endpoint has not yet been assessed and regulatory authorization coverage, payment and commercial outcomes are not assured. With that, I'll turn the call over to Harith.

Thank you, Brian, and good morning, everyone. We are thrilled to present the highly positive top line 6-month results from the REMAIN-1 pivotal study for Revita in post GLP-1 weight maintenance. For years, it has been clear that unhealthy foods in our modern diets are causing dysfunction in the gut and in the duodenum in particular. And this duodenal dysfunction is a fundamental root cause of obesity and type 2 diabetes. Revita targets this gut dysfunction, with the goal of preventing and reversing disease in a disease-modifying manner. The idea is to target the underlying physiology driving disease aiming to provide a durable metabolic reset that offers a potential to reverse the pathology caused by modern diets. We believe the answer to a chronic disease epidemic driven by our food, must involve repairing the root cause rather than simply relying on managing it with a lifetime of medication. Toward this aim, we are starting with individuals who need to stop or want to stop GLP-1s without regaining weight. GLP-1 therapies have proven that dramatic weight losses possible, improvements in weight, diabetes, cardiovascular risk and even aging. There's a $100 billion market that has now been built around that proposition. But the Achilles heel of the GLP-1 class is that the results only last as long as patients continue taking these medicines. The drugs do not change the underlying drivers of the disease, the only forestall disease progression as long as the drugs are in the body. There are currently an estimated 29 million U.S. patients on GLP-1s, and this month alone, over 1 million Americans will stop taking GLP-1s and be at risk of rapid weight regain and metabolic rebound. As such, there are only 2 choices today. You'd stay on the drug indefinitely, while struggling through side effects, tolerability, access and cost issues, or lower dose, lower frequency or discontinue and run the risk of metabolic rebound. That is a problem Revita is built to solve, the REMAIN-1 trial studies Revita in this hardest and highest unmet need market opportunity in obesity today designed to evaluate Revita in patients who are at most risk of rapid weight and metabolic rebound to provide the most rigorous test of efficacy within the obesity category. Revita has FDA breakthrough device designation for post GLP-1 weight maintenance, a potentially efficient de novo regulatory path and favorable reimbursement tailwinds. We set out 3 goals in this pivotal study, and we hit on all 3 at the 6-month co-primary end point. First, most important, the primary analysis in the mITT population was highly statistically significant with a p-value of 0.0023, 80% of GLP-1 induced weight loss retained in the Revita arm versus 67% in the sham arm. Nearly 1/3 of Revita patients maintained stable weight or lost weight after stopping a GLP-1. And this result at 6 months is catching the data at a moment in time. The treatment effect grew from month 1 to month 6 and in fact, doubled between month 3 and month 6. Second, exploratory analyses showed that treatment works even better with longer ablation lengths, consistent with our observations from prior work in our pilot studies. When ablation of the full length of the duodenum is performed, we believe the weight maintenance result in the Revita arm is not only statistically significant but also highly clinically meaningful. Third, we observed the same excellent profile through 6 months that we've come to expect from Revita with no device or procedure-related serious adverse events and a generally mild periprocedural adverse event profile. So REMAIN-1 is a first sham-controlled pivotal trial to show sustained weight maintenance after stopping obesity medications in this most rigorous setting. This is a category defining moment and a potentially landmark results for the field of weight maintenance because it demonstrated through 6 months that ablation of the duodenum has a potential to reset the body's metabolic control set point. That is a totally new approach to targeting obesity and metabolic disease. You can think of Revita like LASIK for obesity. The differentiating value proposition here is that Revita is a single outpatient procedure, takes about an hour with no incisions, no stitches and nothing left behind in the body, and is designed to deliver lasting results for patients. In the context of post GLP-1 weight maintenance, the idea is to enable Revita to help lock in the weight loss that patients have worked so hard to achieve. Through our clinical studies, we have developed a standardized training program that allows reproducible delivery of the technology. Physicians were advised to ablate at least 10 centimeters of the duodenal mucosa, but to aim for the full length and to get the designed full effect of the procedure. This improvement in procedure execution as physician grew comfortable with Revita is standard for medical devices, and it offers a potential for compounding profile optimization with more physician experience. The long length of duodenal ablation combined with a clean safety profile, even at the longest lengths of the ablation, give us confidence that we are in the early innings of exploring the potential of this platform. We knew post GLP-1 weight maintenance would be a hard problem to tackle in the absence of ongoing medical therapy. We were among the first to see that the unmet need in obesity was quickly shifting from weight loss to weight maintenance and decided to design the most rigorous stress test conceivable for Revita's ability to prevent weight and metabolic rebound. The REMAIN-1 study is that randomized double-blind sham-controlled test. The study enrolled adults who had not previously received GLP-1 therapy. They first got tirzepatide lost 15% of their total body weight before entering the randomized phase. Then the medication was withdrawn, which is known to trigger a profound hunger and food noise response in patients discontinuing GLP-1s. And at that point, patients were randomized 2:1 to Revita versus sham. The first 6-month co-primary endpoint compared weight regain in Revita to sham. We've shared those results today. The second will assess weight loss maintenance at 12 months in the Revita arm alone against a prespecified performance goal, at least half of the Revita patients staying 5% or more below their starting weight. We will formally evaluate our key secondary end points only after we have evaluated both of our co-primary results at study completion, and we expect to share those results Q1 2027. 308 U.S. participants were randomized and evaluated in our mITT population used to assess the primary end points. Baseline demographics were balanced across both study arms. The enrolled patient population is consistent with prior Revita studies in weight maintenance and representative of the broader GLP-1 treated population with obesity in the U.S., a majority female, BMI of 30 at the time of randomization and 66% with at least 1 weight-related comorbidity. The mean run-in weight loss on tirzepatide was 18.3%, with the GLP-1 run-in duration of 25 weeks and half the patients enrolled reach the maximum 15-milligram dose of tirzepatide creating the rigorous conditions for the stress test of Revita's effect. In the pivotal 6-month co-primary endpoint, Revita's significantly reduced weight regain versus sham at 6 months with a highly statistically significant p-value of 0.0023. With 80% of GLP-1 weight loss retained at 6 months in the Revita arm. Just as important, the treatment effect grew over time. The arms separated at every visit from month 1 to month 3 to month 6, nearly doubling from month 3 to month 6. This treatment arm separation gives us confidence in the potential findings at 12 months, especially given the historical comparator 12-month results after GLP-1 withdrawal shown at the top right of the graph in front of you. This first co-primary endpoint provides the randomized clinical evidence supporting the long-standing hypothesis that we have held that endoscopic ablation can change post GLP-1 weight maintenance. This is potentially practice-changing, and it points to an entirely new category of weight maintenance therapy for the millions of patients who face weight regain when GLP-1 treatment stops. Revita's effect versus sham in the primary mITT population was robust across all prespecified analyses including effect size evaluations at a run in weight loss of 20% at the population mean of 18.3% with ANCOVA rather than MMRM and in observed means, all analyses yielded highly statistically significant p-values with 2 to 3 0's consistent results. Just as important is the responder analysis. 1 in 3 Revita participants either maintain their GLP-1 weight loss or lost further weight even after stopping high-dose tirzepatide. One in two maintain at least 80% of their GLP-1 weight loss and the corresponding nominal p-values versus sham are 0.02 and 0.0078. Obesity is a consumer market now results in the mITT population with 1/3 of patients either maintaining or losing further weight, help us translate statistical significance to potential clinical meaningfulness as it facilitates the conversation a physician will have with the patient about Revita and what patients may expect, if cleared. Another key finding relates to the dose-dependent effects of Revita as a function of ablation length. Remember, pilot studies indicated Revita outcomes were even better in patients with longer length of duodenal ablation. Revita was highly statistically significant with a growing effect size in the full mITT population and the results look even better with longer lengths of ablation. Patients receiving at least 12 centimeters of treatment had 43% less weight regain than sham. Those in the highest ablation length cohort who received more complete treatment of the full duodenal mucosa had 53% less regain than sham and nearly 60% less than expected from historical GLP-1 withdrawal studies. And the corresponding nominal p-values here are 0.001 and 0.003 versus sham, respectively. These are consistent, substantial, clinically meaningful observed differences and the prespecified hypothesis in this study indicated that more complete ablation can produce a larger effect. We also now see that the procedural efficacy threshold for clinically meaningful improvement is lower than we previously observed in our pilot study, 12 centimeters of ablated length below the greater than 14-centimeter benchmark seen in the smaller midpoint cohort. What does it mean to ablate more mucosa in this procedure? Each ablation step, covers 2 centimeters of the duodenum and interventionists move proximal to distal as they apply treatments to each segment. Each 2-centimeter ablation segment is roughly 2 minutes, so going from 14 centimeters to 20 centimeters is about 6 minutes of incremental procedure time. In this study, physicians took caution on their first cases, but as they grew comfortable over several procedures, all investigators increase the length of the duodenum that they consistently ablated and achieved therapeutic doses within the study. If cleared, we expect this longer length of ablation to become standardized in how physicians train and certify, if approved, we're confident from our technical success in the study and our safety profile that this is going to be part of the algorithm as we go forward. On this graph, you can see the weight regain trajectories from historical studies of semaglatide and tirzepatide withdrawal and from our own pilot sham control. The open circles on the right show where we expect the sham to land at 12 months with 60% to 70% of weight regained by that time. The science around GLP-1 withdrawal is clear. Patients tend to regain nearly all of their pre GLP-1 weight by 18 months, and the rate of regain is proportional to where the weight set point will be at 18 months. You can see the sham arm in our pivotal regaining weight rapidly in the gray solid line, and historical experience suggests that sham should end up at 12 months where the prior data show. Further down, you can see how the Revita arms at various ablation lengths have performed through 6 months with a dose response as a function of ablation length and 85% of weight loss retained in the longest ablation cohort at 6 months. These Revita weight trajectories in the pivotal study are very much in line with our pilot experience, which overlaps through 6 months and plateau at approximately 80% weight loss retained at 1 year. This plateauing of body weight regain is a very big deal. It suggests that Revita patients are trending toward a lower weight set point than where they were before they enter the study. That is our core hypothesis. That Revita can deliver a fundamental reset to the body's abnormal weight set point. Turning to safety. There were no device or procedure related SAEs serious treatment-emergent events occurred in 2 Revita participants and 4 sham participants, none was independently adjudicated by a DSMB to be probably or definitely related to the device or procedure. Related side effects were predominantly mild Grade 1 events. 94% of those Revita events occurred within 7 days, the vast majority of them occurred on the day of the procedure alone. These are acute procedural events, not lingering effects, common events included oropharyngeal pain, nausea, abdominal pain. The risk window here appears to be short and predictable. And when you consider that a major reason for GLP-1 drug discontinuation is a drug classes side effect profile, which is neither short nor predictable, we view the mild peri procedural pattern as highly encouraging for patient enthusiasm. On to patient adjudication. REMAIN-1 had excellent retention through 6 months with 94% of participants attending the 6-month visit. Sham participants were 3x more likely to restart an anti-obesity medication than those in the Revita arm. That 3x difference is a conservative estimate, and the observed sham effects potentially mask the true treatment effect of Revita. This high rate of restarts mirrors what we are seeing in the field with the latest GLP-1 drug studies. And we anticipated this possibility, especially as GLP-1s have gone from a regulated market to a widely available consumer market where patients can effectively restart on demand, our stats plan included a prespecified framework for handling those events. Let's look ahead to the upcoming 12-month endpoint. The second co-primary will evaluate the proportion of Revita patients who remain at least 5% below their starting body weight at 12 months against a 50% performance goal. Applying the endpoint methodology at 6 months, the model estimated responder rate was 97.2%, nearly double the 50% performance goal. The nominal p-value at 6 months was less than 0.0001. If and when the second co-primary endpoint is also met at 12 months, then our prespecified key secondary endpoints will also then be evaluated in sequence for formal statistical testing. This finding is robust to key sensitivity analyses, again, as we showed with co-primary endpoint number one. And these findings give us substantial confidence as we approach the remaining assessment at 12 months in Q1 2027. Today's results also allow us to advance the preparation of our potential de novo submission. As we discussed previously, FDA's pre-submission feedback indicated that Revita safety profile could be consistent with the Class II de novo classification. That feedback is advisory with final determination dependent on the agency's review. Revita holds breakthrough device designation for post GLP-1 weight maintenance that provides prioritized review, interactive engagement as we prepare this submission. How does Revita get paid for? There are 3 favorable developments underway for Revita in coding, payment and coverage. First, on coding. On October 2, the AMA published Category III CPT code 1122T, a dedicated code for reporting the Revita procedure with submucosal lift and thermal ablation effective on January 1, 2027. Second, payment. CMS' transitional pass-through TPT program for breakthrough devices supports our potential route to transitional pass-through payment subject to applicable requirements. If Revita qualifies as we expect it will, that could help hospitals recover catheter costs during the early launch period and support an economically workable service line with a positive contribution margin from day 1. Third is coverage. RAPID is a regulatory alignment for predictable and immediate device coverage pathway. CMS and FDA announced the RAPID pathway in April, which may provide a national coverage determination issued the same day as FDA authorization for breakthrough devices with final coverage as soon as 60 days later for Class II devices like ours. In the proposed notice, CMS has explicitly requested feedback during an open comment period on the temporary process that could bring devices already under an IDE like, Revita, into the proposed rapid coverage pathway. Clinical and patient communities are engaged, the ASMBS, AGA, ASGE, individual physicians and obesity patient advocacy groups have submitted comments supporting this pathway and Revita's candidacy. If codified by CMS, which is expected in early 2027, this could offer a materially better coverage position than we have been planning for under our base case assumptions and may create a substantial upside in our model. What we are building with Revita is highly relevant to CMS and CMS beneficiaries. The Medicare GLP-1 Bridge program began on July 1, expanding access to obesity medicines and creating a patient population within CMS that is highly relevant to the coding coverage and payment just described. So with all of these advancing together with our highly positive clinical findings a breakthrough device designation, de novo pathway, they all strengthen the path from a successful procedure to an accessible and scalable business. Stepping back, what could this mean for Revita's long-term role in obesity? We chose post GLP-1 weight maintenance first because it is both the hardest test and the clearest near-term opportunity. But it is an absolute stress test withdrawal of a highly-potent appetite-suppressing medication in people with obesity. And today's 6-month comparison is, in our view, the definitive central proof point and a turning point for our field. If Revita can change the course of wait after withdrawal of highly potent medication like trizepatide, we expect that other less demanding clinical settings may show other compelling effect as well. The second compelling use case is adjunctive treatment. Given Revita's excellent safety and tolerability profile, it's complementary to other approaches. We believe Revita could work alongside rather than compete against any of the Vanguard therapeutic options to obesity care to either deepen therapeutic efficacy or enable superior results with less tolerability burden, fewer doses, lower doses, et cetera. And that is what we mean by a potential backbone therapy, an intervention that could support patients at multiple stages of care. At our September 1 Investor Day, which I encourage you to go back and review we review that Revita, if cleared, could become a substantial business, the largest unmet need in obesity, a capital-efficient center of excellence launch, single-use catheter model, leveraging existing infrastructure and extremely large patient pools within established metabolic practices. You'll hear about that from Dr. Dan in just a minute. We believe the results seen today strengthen our path towards building a profitable business with line of sight to potential cash breakeven within 5 to 8 quarters of launch. And critically, these figures are our base case assumptions, which don't presume a national coverage determination by a RAPID. Suffice to say, if RAPID applies to Revita, our launch numbers are conservative. Today, we have reported the pivotal 6-month treatment comparison at the core of that strategy. We believe it is a transformative result for Fractyl and the future of obesity care. Here's what to watch for next potential de novo submission later this year, 12-month co-primary results expected in the first quarter of 2027 and from their FDA review, payer decisions and if cleared, commercial execution. We are well on our way toward a large and compelling commercial opportunity. Let me bring the story together. GLP-1s have changed what is possible in losing weight. Our ambition is to change what is possible and keeping it off durably to make Revita the GLP-1 off-ramp. Today's result is the clearest evidence yet that this ambition is within reach and we believe it could reshape how obesity is treated after GLP-1 therapy. The results opened the door to a new category of medicine, onetime outpatient procedures that durably improve metabolic health, like LASIK for obesity, and we are striving toward that metabolic that pathway toward durable metabolic health and freedom from obesity and metabolic disease without chronic medicines in the largest consumer market in health care. That is an opportunity ahead. And so I'm pleased to be joined by Dr. Adrian Dan, Medical Director of the Weight Management Institute of Summa Health and Professor of Surgery at Northeast Ohio Medical University and Director at large of ASMBS. I turn it over to you, Adrian.

Thank you, Harith. Thank you for that wonderful presentation and recap. I'll start just by saying a few words about myself. You don't need to twist the surgeon's arm to speak about themselves for a little bit, but I want you guys to know why I'm. And I'm honestly honored and humbled to be a part of this, not something I typically do, but it's my conviction and excitement about the data that we just received and the technology that inspires me to share my thoughts. So I've been in practice just over 20 years, all at Summa Health and Akron, Ohio. And my practice consists of metabolic surgery, obesity medicine and endoscopy as a matter of fact catching me today at the beginning of a busy endoscopy lineup here. I did my general surgery training at Michigan State University and followed that with fellowship training in Advanced Laparoscopy and Bariatric Surgery at the Cleveland Clinic. I do have a passion for metabolic health. I hope you guys can sense that, and I see patients with every facet medicine surgery endoscopy. I have a Board certification and general surgery with additional focused practice designation in Metabolic and Bariatric surgery by the American Board of Surgery. And given the shifts in the landscape of obesity management, I went back and received my Board certification in obesity medicine by the ADAM a few years back. So I eat, I sleep, I breathe and I live, the management of obesity, diabetes and cardiometabolic conditions. I am the Director of our Weight Management Institute, which is morphing into a comprehensive metabolic health center and years of service and advocacy have led to my election by my peers to serve, and I'm humbled to serve as a Board of Directors of the American Society for Metabolic and Bariatric Surgery, I'm not here to leverage that position. I'm speaking with my own true convictions and excitement about this technology and the potential to offer this to patients. We are consistently one of the highest volumes in metabolic surgical procedures in our region and a region that boasts some impressive institutions in Northeast Ohio. And also in our center, we have 5 medicine physicians, 2 APPs that do nothing but care for patients from a medical standpoint, and we also have 5 bariatric surgeons. So we are a very high-volume center. And we're seeing an inundation of flood that's overwhelming our center of patients with elongating lists, trying to get in for initial care as the folks who have already began GLP-1s and have achieved good results are flooding that ability for us to continue taking new patients in. So I see this as a very compelling opportunity because the demand for something other than the lifelong medications or some of the anatomy-altering procedures are available, the demand exists on both sides of the equation. On the side of patients who are seeking it and the side of physicians who are excited about offering something that makes sense from a scientific standpoint. And that creates a powerful combination, a combination where there's growing patient demand. The more patients succeed to GLP-1s, the more people will be looking for a way to lock in those accomplishments. And also, there's physician interest in a scalable pathway to adoption for hospitals. It makes sense, and we're not having to build new care delivery networks and capital investments and the infrastructure already in place in every which way you look at it. So with that, I'll turn it over to you guys for any additional questions about how I see Revita fitting into clinical practice.

Yes. Great. Maybe I can start and Harith, please feel free to jump in. So maybe talk about your interpretation about the clinically meaningfulness of this 6-month data and how it could potentially affect your practice and how you may speak about Revita with patients if approved, cleared.

Well, the first thing I'm going to say is that the results exceeded my expectations. I think this is wonderful that we have validation that the concept works. Patients are looking for something durable. They're looking for something minimally invasive and incision-less and effective. I just look at the difference between the patients that I see for surgery before surgery, who are concerned, worried, nervous, and I see my patients today on an endoscopy day where nobody is concerned about an endoscope procedure. They're actually happy to be here and take a load tap and get a procedure and get a benefit out of it. What's really exciting is that when looking at the data, there's actually -- well, first of all, in patients who have had more than 20 centimeters of ablation, the 53% less weight gain with the statistical significance and clinical significance that I see with that amount of weight loss maintenance, that's fantastic. And it tells us that with increased quality control with increased refinement of the procedure with increased education and appropriate credentialing we can improve on that in -- the [indiscernible] likelihood is that will improve. So that ablation dose dependence tells me is that the concept is validated that the science makes sense and the reset theory is something that I could explain and patients would understand. Also really greatest fact that 1/3 of patients are continuing to lose weight or maintaining their weight loss. That is amazing. That's a win-win for the patients. They get come off their medications, they get to escape what they're looking to escape. Initially, patients are quite content to deal with the medication anchor to deal with the cost of the medication and the side effects as the dosages increase because they're finally realizing that, "Hey, this isn't a choice and actor behavior, this is a disease." And it's prudent by the fact that it could be modifiable. And then after a while, they ask what is next? What are my options? And I would present patients with all those options. But looking at this data, I can show the numbers. The outstanding safety profile also screams volumes to me. It's something that can tell the patient, you're looking for something safe, you're looking for something minimally invasive, and the safety profile is frankly, great. And when the adverse events, the few that do occur, they are very mild that occur with procedure itself. So I hope that answers that for you, Brian. That's how I see these results. These are the most important things that jump out at me. And what's exciting is that those are things that I could put into terms that patients understand.

Fantastic. Thanks for that. Maybe a 2-parter next. So help contextualize how a patient might think about Revita within its continuum of different treatment options available to the patient, a highly educated consumer market at this point within obesity. They know what's out there, they know what other medications are available, they know what medications are coming. Contextualized Revita within the landscape of pharmacotherapy, maybe juxtapose to how they're thinking about surgery as the first part. And then second, maybe an attraction of that, how maybe contextualize the potential patient volumes of maybe how many patients might be amenable to Revita within your practice and maybe more broadly?

Sure. I'll take the first one first. So that conversation I alluded to earlier, when the patient is asking you, what is next? Where do we go from here? That's typically guided by the patient, and I think it's important to provide that comprehensive approach we give the patient all the options. As I said before, initially, the weekly medications, the costs associated with the medications that side effects are something that the patient is willing to accept. They're actually very excited about the results of their weight loss. But after a while, they're looking for the next step. And I would, of course, provide my patients with all the options, and I would imagine, as with every choice we have in life, some will choose to continue the medication, "Hey, it's worked, let's continue to do it." A few and depending on the clinical severity of their obesity may choose to proceed to surgery. But the main reason, Brian, that in the United States and worldwide, we are sorely under treating the disease of obesity is because there's something missing. And what's missing there is what patients are looking for, a minimally invasive, nonsurgical durable effective procedure. And I think that market and that gap is enormous. And I would certainly provide my patients with all the options. And I think the patients oftentimes look for that best of both worlds option that currently does not exist, unfortunately, in the commercial sense. I will go to your next question then. I think that was about where I see this going in terms of the number of procedures, it depends on the size of the center. A large center like ours, we have a very large volume of patients, probably in the thousands, which are continuing to get chronic medical therapy office visits every 3 to 6 months to follow up on their progress. And I would imagine, as this becomes available commercially, we would begin with a few cases before we ramp up. And obviously, as the demand increases from word of mouth and people hearing about the options, and our patients they are highly educated and very wise to what is available out there. And just as a reference, there are a few other endoscopic procedures that are available today that patients ask about all the time. We just don't see that excitement on the physician side because of the cumbersome nature of those operations or procedures and frankly, the lack of standardization of those procedures and results. But something like this has the potential of having the patients be very interested. How many can we do? I think the demand is going to be wide. I think if you think about endoscopy centers, I just happened to look at our Board here today. There are endoscopists that do 2030 colonoscopies or upper gindoscopies in a day. There are very quick turnover procedures. They are -- there's no need for closure decisions. There's no need for extensive recovery. And many endoscopy centers, including the one that I happen to be at today do more than 10,000 procedures annually. So this is something that in endoscopists, the bariatric interventionalists can add to their practice and be quite efficient about performing 10, 15 of these procedures in a day. And hopefully, for centers, like mine, hundreds in a month. And I fully believe that's conservative estimates. If you just look at the number of patients with overweight obesity, morbid obesity, severe obesity that exists in the United States, there is a potential for hundreds of thousands of these being performed annually within the United States.

Excellent. Thank you for those remarks. Dr. Dan. With that, I think it makes sense for us to open it up to the live Q&A. Operator, please begin.

Great. Yes. Thanks, Brian. So we'll be conducting a question-and-answer session with our speakers. So please hold for a brief moment while we poll for questions. So our first question comes from Mike DiFiore at Evercore.

Congrats on the data. Two for me. Just regarding the higher drug restart rate on sham. How does a 6-month difference look if those patients wait or kicked in under kind of a treatment policy approach? And which estimate do you expect FDA to focus on in the de novo review. And my follow-up question is the midpoint data was framed around complete ablation length above 14 centimeters. It will be helpful to see how that prespecified group looks in these pivotal data at 6 months, and how do you settle on the 12 to 18 centimeters versus 20-centimeter cuts for today?

Yes. Thank you, Mike. We've been very clear, and we've been working with the FDA on defining the efficacy cement as the primary evaluation metric in this trial, largely because of changes in the field where there are known GLP-1 restarts and placebo arms in a number of different drug studies and device studies that have preceded us. We know this is an issue that the FDA is well aware of. On the second question with respect to greater than 14 centimeters. As I mentioned, that is a key secondary endpoint in our pivotal and through our gated hierarchy for statistical control, we will evaluate that formally at the second key primary end point which will come with the 12-month data. And so you can please stay tuned for that. Now that we have many more patients in whom we have done the full ablation, what we provide to you is a clear signal with far greater resolution that greater than 12 centimeters of ablation achieves clinically meaningful results I believe that, that would be what physicians would tell one another is what the minimum that should be done. And I think that more is clearly better as is evidenced by the -- at 6 months as evidenced by the data here. And I think that's going to inform how folks like Dr. Dan and the societies will certify and train their folks, but it also goes to show, given the absence of any observed adverse effect level at that level that we are just in the early innings of profile optimization. So we chose greater than 12% because that is the amount of ablation where we're beginning to see clear evidence of efficacy, and we chose 20 because that is generally the full length of the duodenum and most individuals. You will see the greater than 14 when we have it at 12 months.

Our next question comes from Whitney Ijem at Canaccord.

Congrats on the data. I guess first for Dr. Dan maybe, we're starting to see more data in the weight maintenance setting from non-incretin-based therapeutics. Just curious, your thoughts on the data we're starting to see there and maybe thinking about the Revita data in the context of that and how you might think patients would respond to different nonincretin-based options, including Revita in an ultimate commercial setting based on some of the early efficacy we're seeing so far. So that's the first question. And then second question, follow up on the 20% of sham patients who restarted weight loss drug. Sorry if I missed it, but what time points? Or do you have any more data on those patients? And are you -- do you have are you planning to run an analysis on the patients who did not restart weight loss drug relative to the Revita arm? I'll take the first one.

Thank you, Whitney, for the question. I would imagine that you're referring to some of the other endoscopic therapies, balloons, suturing procedures...

Probably, the other drugs, Adrian, the other drugs that are coming out now.

Yes. So yes. So if you're referring to the other drugs, yes, the efficacy of GLP1 an incretin-based therapy and non-incretin-based therapy are continuing to improve, that is without a doubt and beyond the scope of going into great detail in this answer. However, the more people succeed with them, the more people will be looking for a way to lock in those accomplishments. To lock in those health benefits. And as we all know, it does not take more than 15%, 20% of total body weight loss to get some amazing health benefits, including sleep apnea resolution and improvement of diabetes, if not resolution of diabetes and so many other things. So I think that -- in a nutshell, the GLP-1 therapy is creating the success that Revita will help lock in and secure for patients. And I think that's a powerful thing for them.

And then I'll take the second question that folks resume GLP-1s at various points in time and follow-up, and you can sort of infer when those were based on that ends at each of the time points. Some patients clearly became extremely hungry 2 to 3 weeks after the discontinuation of the GLP-1 in the randomization -- right after randomization and restarted early some restarted a little bit later. And those per hour prespecified analysis we sensor all data post GLP-1 or anti-obesity medicine resumption and then take last weight beforehand in the efficacy estimate. That's how this is done. That's how the fields handling these issues today.

Our next question comes from Nick Mattiacci at Craig-Hallum.

This is Nick on for Chase Knickerbocker. So if you guys could talk about your confidence that the de novo review clock can begin before the submission of the 12-month data on the second coal prime area. And if you could also discuss your best and worst case time lines around how you see the review and potential approval time line for Revita?

I would assume that the clock will begin when we announce our second co-primary endpoint success, and that is expected to occur in Q1. I think that we will get this process started, but I don't think that the FDA review clock could be expected to begin before then. That's an active topic of conversation. And that means a few month delta between end of this year and in Q1, but less than a quarter.

Got it. And then the second one is, how do you guys think physicians will think about the placebo just set of fact size versus absolute weight regain data for Revita and that same question is for how payers might think about that.

Yes. So I think, number one, the placebo-adjusted effect size is growing. I don't think we'll know where it lands actually until we're over 18 months, but you look at the historical controls and where the sham is likely headed and you look at where Revita is headed in, especially in the longer ablation cohorts relative to the midpoint, we feel very, very confident in that effect size being robust I think that when a doctor talks to a patient about this in a consumer market, they are not talking about placebo-adjusted effect size. What we have done here with this study is we have clearly in a prospective manner, establish the efficacy of Revita versus a sham in the most rigorous test of immediate and complete discontinuation. Now that, that question is addressed and disposed. I think when a doctor talks to a patient about this, the doctor is going to say, here's what you can reasonably expect to happen to you, but I would love Dr. Dan to weigh in and share his perspective.

No, Harith, I completely agree with you on that. I think patients are looking for very simple answers to how will I be able to maintain my weight loss. And I think that's the conversation you're going to have with them rather than the other mentioned points.

And so then how compelling is this notion that 1 in 3 patients might maintain their body weight or lose further weight even after stopping in the absence of ongoing therapy. How would that resonate? And if you've talked to patients about Revita, maybe an opportunity to just say what -- as a potential solution, what you've kind of heard from them?

Yes. I think patients would welcome that. I think patients would be very satisfied with maintaining their weight loss. The possibility of additional weight classes, especially as we begin to understand what cohort of patients is likely to continue to have weight loss is the cherry on top, so to say.

Our next question comes from Chi Fong at Bank of America.