Fractyl Health raises $110 mln in US IPO (Feb 1)

Obesity and diabetes drug developer Fractyl Health on Thursday priced its U.S. initial public offering (IPO) at the midpoint of its indicated range to raise about $110 million. The company, backed by Investment firm Mithril Capital and venture capital firm General Catalyst, priced its offering of 7.3 million shares at $15 per share.

Obesity and diabetes drug developer Fractyl Health on Thursday priced its U.S. initial public offering (IPO) at the midpoint of its indicated range to raise about $110 million.

The company, backed by Investment firm Mithril Capital and venture capital firm General Catalyst, priced its offering of 7.3 million shares at $15 per share. The company earlier expected the IPO to be priced between $14 and $16 per share. Lexington, Massachusetts-based Fractyl Health develops "disease-modifying" therapies that target organ-level root causes to treat metabolic diseases like type-2 diabetes and obesity.

An increasing number of drugmakers are targeting breaking into the lucrative obesity market that is now estimated to reach $100 billion at a minimum by the end of the decade, as consumers flock to the new treatments that have been shown to reduce weight by as much as 20%. Novo Nordisk and Eli Lilly have surged ahead in the competition to claim a share of the weight-loss drugs market.

Fractyl Health will debut on the Nasdaq on Friday, and trade under the symbol "GUTS". After a two-year dry spell, 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. But the recovery has been uneven so far.

Last month, Healthcare companies CG Oncology and KKR-backed BrightSpring Health Services made contrasting market debuts, signaling investors remained cautious.