$GUTS: The 10x+ Opportunity That’s (Still) Under the Radar — Fractyl Health and the Untapped $175B Market
While the world is celebrating GLP-1 drugs, a critical problem is emerging: how do patients maintain weight loss once they stop taking the injections? Fractyl Health is aiming to lead this new segment
introduction & context
Over the past few months, I’ve been going deeper into the space of obesity and metabolic diseases — a market that is evolving rapidly and will likely have a massive impact on global health over the coming decades.
We’re all aware of the current boom in GLP-1 drugs (Ozempic, Wegovy, Mounjaro), with impressive results in both weight loss and type 2 diabetes control. But there’s a major issue that’s not getting enough attention:
👉 85% of patients regain weight after stopping GLP-1 therapy.
👉 The healthcare system still doesn’t offer an effective, durable solution for maintaining weight loss — and payers are growing increasingly concerned about the chronic costs of these therapies.
That’s where Fractyl Health ($GUTS) caught my attention — a company with a truly differentiated, physiology-based approach aimed precisely at this gap in the market.
The company is still early stage (pre-revenue), but it has already received FDA Breakthrough Device Designation and is building a pipeline that — if successful — could unlock a $175 billion+ opportunity.
👉 I have not taken a position in this stock — but I’m following it very closely.
👉 And in this article, I’m sharing everything I’ve learned so far, so you can track this thesis in an informed way as well.
Company history — the origin of Fractyl and its differentiated vision
Fractyl Health’s story began with a personal experience of its founder, Dr. Harith Rajagopalan, a trained cardiologist and scientist.
For years, Harith watched his father and uncle battle type 2 diabetes, even while following traditional treatments to the letter. Their frustration kept growing: despite all their discipline, the disease continued to progress.
As a physician, Harith also cared for patients struggling with obesity and cardiovascular disease — and he could clearly see that current treatments were addressing symptoms, not the root causes.
Then, one particular patient experience changed everything:
👉 One of his patients, with severe obesity and diabetes, underwent bariatric surgery.
👉 Just three days after the procedure, this patient showed:
Normalized blood sugar levels, without medication.
A complete loss of appetite for unhealthy foods, something that previously seemed impossible.
The most remarkable part? The surgery hadn’t touched the pancreas or the brain. The dramatic change came from somewhere else:
👉 the duodenum — the first section of the small intestine, which absorbs nutrients and signals the brain and pancreas on how to respond to what we eat.
“That’s when I realized: duodenal dysfunction is an upstream cause of obesity and diabetes — and no one was targeting it.”
— Dr. Harith Rajagopalan, CEO of Fractyl Health
This moment sparked the creation of Fractyl. In Harith’s own words:
“We spend our lives trying to control blood sugar as if that’s the ultimate goal — but elevated blood sugar is just a symptom, like a fever in pneumonia.
If we don’t treat the root cause, we’ll never truly cure the disease.”
— Dr. Harith Rajagopalan
This insight shaped the company’s mission:
To develop therapies that target the root of metabolic disease.
To restore normal physiology in the gut and pancreas.
To deliver durable solutions, so patients don’t remain dependent on lifelong medications.
“The greatest wish of patients is not to manage their obesity or diabetes better — it’s to no longer be a patient.
Our mission is to give them that possibility.”
— Dr. Harith Rajagopalan
Fractyl moved from vision to clinical execution with impressive speed:
✅ It launched the Revita® platform — an innovative endoscopic procedure that regenerates the duodenal lining.
✅ It created the Rejuva® platform — a pancreatic gene therapy enabling the body to naturally produce GLP-1 in a regulated way.
Today, Fractyl is a clinical-stage company, with Revita already in pivotal trials and FDA Breakthrough Device Designation — clear recognition of its potential to address a massive unmet public health need.
Analysis — How Fractyl’s technology works and why it matters
1️⃣ How Revita works
Revita® DMR (Duodenal Mucosal Resurfacing) is a minimally invasive endoscopic procedure, performed in about 45 minutes, with no need for hospitalization.
How it works:
A specialized catheter is introduced via endoscopy into the duodenum (the first section of the small intestine).
This catheter delivers controlled thermal energy that:
precisely removes the altered mucosal layer (damaged by chronic fat and sugar intake).
preserves the deeper layers of the duodenum.
In the weeks that follow, the body regenerates a healthy new mucosa, restoring normal metabolic signaling between the gut, brain, and pancreas.
“The duodenum is a critical center of metabolic signaling. When it malfunctions, it distorts appetite regulation, glucose homeostasis, and hormonal balance.”
— Dr. Harith Rajagopalan
2️⃣ Why this matters (physiology and impact)
Fractyl’s research — as well as what’s been observed after bariatric surgery — shows that the duodenal mucosa is not designed for the modern diet:
Chronic fat and sugar exposure leads to changes in the mucosa that:
distort hormonal signaling (GLP‑1, GIP, PYY, etc.).
trigger excessive hunger and cravings.
promote insulin resistance and worsen glycemic control.
GLP‑1 drugs help manage these symptoms — but:
they do not restore the original function of the duodenum.
they do not offer lasting benefits once therapy stops.
Revita, by regenerating the mucosa and restoring signaling:
✅ helps maintain satiety in a physiological way.
✅ contributes to improved glycemic control.
✅ allows patients to maintain weight loss even after discontinuing GLP‑1 therapy.
This is why it received Breakthrough Device Designation for weight maintenance after GLP‑1 therapy — a massive unmet market need.
3️⃣ How it compares to current therapies
As we can see:
👉 Revita offers a unique profile: safe, one-time, non-invasive procedure with potential long-lasting effects.
👉 It doesn’t compete with GLP‑1 — it complements them, providing the off-ramp payers are looking for.
“Payers are asking us: how can we help patients transition off GLP‑1 therapies?
Right now, there’s no good answer. Revita aims to be that answer.”
— Dr. Harith Rajagopalan
4️⃣ The Rejuva pipeline — the moonshot
Beyond Revita, Fractyl is developing Rejuva®:
A pancreatic gene therapy (via AAV9 vector).
It teaches beta cells to produce endogenous GLP‑1, in a regulated, physiological way (only when needed).
In preclinical studies:
✅ greater and more durable weight loss than chronic semaglutide.
✅ maintenance of metabolic benefits even after stopping GLP‑1.
✅ natural GLP‑1 production — avoiding issues of saturation/overexposure seen with synthetic therapies.
If successful in humans, Rejuva could introduce a completely new treatment model:
→ a single dose that restores hormonal and metabolic homeostasis physiologically.
Practical lessons — why I’m following this company closely, and the long-term potential
As I went deeper into Fractyl Health’s story, a few key takeaways emerged that convinced me this is a company worth tracking closely.
1️⃣ They are targeting a real, unsolved problem
We have GLP-1s that work well — but:
85% of patients regain weight after stopping GLP-1 therapy.
There is currently no approved therapy for maintaining weight loss post-GLP-1.
Payers are actively searching for solutions to “deprescribe” GLP-1s, as the CEO himself has confirmed.
Fractyl is positioning itself to be the solution to this market gap.
2️⃣ The technology has a strong physiological rationale
Revita regenerates the duodenum — addressing an upstream cause that GLP-1 drugs do not correct.
Rejuva (pipeline) is a true moonshot — offering a much more physiological and durable way to achieve GLP-1-like benefits.
3️⃣ The company is executing with high quality
Fractyl has moved very quickly into pivotal trials.
It secured FDA Breakthrough Device Designation — showing that regulators recognize this is not just a "nice idea," but something with real clinical potential.
The opportunity — the logic behind the projections
Now let’s revisit the projections I shared earlier, with the clear logic behind them:
Why $5,000 per procedure?
Advanced therapeutic endoscopic procedures already command similar pricing ($3K–6K).
GLP-1 therapies cost $10K–15K per year → if a $5K procedure helps avoid chronic GLP-1 use, that’s highly attractive for payers.
How many patients are eligible?
More than 10 million patients in the US are expected to be on GLP-1 therapy in coming years.
~85% drop off therapy in the first year.
If we assume just ~1M patients per year would be candidates for weight maintenance → the TAM is massive.
Penetration assumptions: very conservative
For comparison: bariatric surgery performs ~250K–300K procedures/year in the US today.
Revita is far less invasive and more affordable — reaching 100K/year is absolutely plausible.
Valuation multiple: conservative
Successful medtech companies in similar markets typically trade at 5x–10x revenue (ex: Inspire Medical, Axonics, Shockwave).
I’m using a conservative 5x revenue multiple here.
Summary — the risk/reward I see
For all these reasons, even though I haven’t taken a position yet, I’m following Fractyl Health very closely.
👉 The company is attacking a problem the market clearly values — and one that has no good solution today.
👉 The potential upside is meaningfully asymmetric vs. today’s risk.
Why revenues should realistically only start in 2027
One question that often comes up: if Fractyl’s pivotal trial is already underway, why wouldn’t we see revenue earlier?
The answer lies in understanding the regulatory and commercialization timelines for medtech devices — even those with FDA Breakthrough Device Designation.
Here’s what the path looks like:
Even with Breakthrough Device status, the FDA process requires:
✅ Robust pivotal data.
✅ Full data cleaning and analysis.
✅ Comprehensive submission package.
✅ Safety audits.
✅ Detailed discussions with payers and initial physician training.
This is not an "overnight" process. It’s fast by medtech standards, but even the best-executing companies in this space typically see ~6–12 months between pivotal readout and first revenue.
“We expect Revita to enter the market within the next two years.”
— Dr. Harith Rajagopalan, CEO of Fractyl Health
(This timeline is fully consistent with a 2027 commercial launch.)
Another important factor: early commercial ramp takes time.
No device like this scales to 50K+ procedures in the first 6 months.
Payers need time to establish reimbursement pathways.
Physicians (primarily gastroenterologists) need training.
👉 That’s why I model 2027 as the first year of meaningful revenue — and expect real scaling to start in 2028+.
Risks and key points to monitor
As with any early-stage opportunity, it’s important to be mindful of what still needs to be validated.
In my view, the core thesis around Fractyl Health is sound — but there are a few areas worth watching carefully over the next 12–18 months:
1️⃣ Pivotal trial outcome
The REMAIN-1 pivotal trial is progressing well.
Primary endpoint (6-month weight maintenance post-GLP-1) is expected in H2 2026.
Early open-label data have been encouraging, and the company has executed very quickly — but the pivotal readout remains the main catalyst.
As with any trial, it’s important to see the full randomized data before assuming commercial success.
2️⃣ Reimbursement and payer engagement
The economic rationale is strong: a $5K one-time procedure vs. $10K–15K per year for chronic GLP-1 use.
Early feedback from payers has been very positive, with active interest in finding ways to transition patients off GLP-1s.
That said, formal reimbursement pathways take time to establish — this is something to monitor as approval approaches.
3️⃣ Commercial rollout and physician training
Revita will require adoption by gastroenterologists/endoscopists.
This is very achievable: the procedure fits well into existing workflows and is similar to techniques they already use.
Still, driving broad awareness and adoption across the GI community will be an important part of scaling.
4️⃣ Execution timeline
With Breakthrough Device status, FDA review is prioritized — and my base case assumes approval in 2027.
As with any regulatory process, timelines can shift slightly — but so far Fractyl has executed at an excellent pace.
5️⃣ Rejuva remains early-stage — but clear optionality
Rejuva is an exciting program with strong preclinical data.
However, it is still in the early stages of development — and I view it as long-term upside, not a requirement for the near-term Revita thesis.
I will be watching closely as Rejuva progresses into first-in-human studies.
Summary of risk/reward
In summary:
✅ The market opportunity is large and clearly defined.
✅ The physiological rationale is strong and differentiated.
✅ The company’s execution so far has been excellent.
✅ Payers are showing real interest in the solution Fractyl is building.
Areas to monitor:
🔎 Final pivotal trial data in H2 2026.
🔎 Progress on reimbursement pathways.
🔎 Commercial execution and physician training.
🔎 Early clinical progress on Rejuva.
👉 For me, this is a very attractive setup: clear asymmetric opportunity with a well-defined set of milestones to track.
That’s why I’m following Fractyl Health very closely — and will continue to update my view as new data emerges.
Conclusion — why I’ll be watching Fractyl Health closely
Fractyl Health is one of the most interesting asymmetric opportunities I’ve come across recently.
👉 The company is addressing a very real and unsolved problem — how to help patients maintain weight loss after GLP-1 therapy.
👉 The physiological rationale behind Revita is sound and differentiated.
👉 The company has executed very well so far — moving from idea to pivotal trial at remarkable speed.
👉 Payers are clearly looking for solutions in this space — and Revita is well positioned to fill that gap.
Of course, there are still key milestones ahead: pivotal trial results, reimbursement pathways, and commercial rollout.
But this is exactly the type of story I like to track early: a company building something that could fundamentally shift a large market, with a clear and credible roadmap.
👉 I haven’t taken a position yet — but I’ll be following every step closely.
👉 If you want to follow it with me, you can join as a paid member — I’ll be sharing future updates and key milestones as they unfold.
One last note: If you found this deep dive valuable, feel free to share it — and if you want more in-depth analyses like this, becoming a paid member helps me dedicate more time to these types of articles.
Thanks for reading — and see you in the next one 🚀.