A securities class action has been filed against Fractyl Health, Inc. (GUTS) on behalf of all persons and entities who purchased or otherwise acquired Fractyl Health securities between January 13, 2025 through January 29, 2026. This case has been filed in the USDC – SDNY.
According to the complaint, Fractyl is developing, inter alia, the Revita DMR System (“Revita”), an outpatient procedural therapy designed to durably modify duodenal dysfunction, a pathologic consequence of a high fat and high sugar diet.
The complaint alleges that during the Class Period, defendants failed to disclose that:
Revita was less effective than defendants had led investors to believe, and/or operational issues at one or more of the REMAIN-1 Midpoint Cohort’s clinical sites compromised the integrity of its efficacy results;
accordingly, Revita’s clinical, regulatory, and commercial prospects were overstated, as was the REMAIN-1 Midpoint Cohort’s ability to assess Revita’s efficacy; and as a result, defendants’ public statements were materially false and misleading at all relevant times.
Plaintiff alleges that on January 29, 2026, during pre-market hours, Fractyl issued a press release announcing six-month data from the REMAIN-1 Midpoint Cohort.
The press release disclosed, in relevant part, that “[a]cross the prespecified efficacy population . . . , Revita-treated patients experienced a 4.5% weight regain vs 7.5% in the sham arm at 6 months”, representing a significantly more modest efficacy result than previously disclosed results and falling short of investor expectations, while stating that “[t]he Midpoint Cohort was not designed to be sufficiently powered for efficacy analysis[.]”
The same day, also during pre-market hours, Fractyl hosted a conference call with investors and analysts to discuss the six-month data from the REMAIN-1 Midpoint Cohort. During the call, Fractyl’s CEO defendant Harith Rajagopalan indicated that issues at one of the REMAIN-1 Midpoint Cohort study sites, which “had higher-than-expected regain across both arms,” were at least partly to blame for the cohort’s disappointing six-month efficacy results.
Following these disclosures, Fractyl’s stock price fell $1.245 per share, or 68.03%, to close at $0.585 per share on January 29, 2026.
On the same day, during post-market hours Morgan Stanley downgraded the stock to an “Equal-weight” from “Overweight” rating and cut its target price on the Company’s stock to $2.00 from $8.00.
On this news, Fractyl Health’s stock fell another 21.7%, to close at $0.46 per share on January 30, 2026.