SAN FRANCISCO – Type 2 diabetes often becomes progressively more difficult to manage, moving from prediabetes that can be addressed via weight loss and exercise eventually through requiring multiple daily insulin injections. A novel procedure could offer the opportunity to turn back the clock for type 2 (T2) diabetes patients who are insulin-dependent.

Fractyl Laboratories Inc. has developed an outpatient procedure known as duodenal mucosal resurfacing (DMR) that, when used in combination with a GLP-1 receptor agonist drug, can reverse the need for insulin for type 2 diabetes patients who were previously insulin-dependent. That's according to data from a small study presented here on June 9 at the American Diabetes Association's 79th Scientific Sessions (ADA).

T2/NAFLD indication

The Lexington, Mass.-based startup is also working to demonstrate efficacy in patients with fatty livers, known as nonalcoholic fatty liver disease (NAFLD) or nonalcoholic steatohepatitis (NASH) with the latter being a more severe subset of the former. It reported data supportive of that indication recently, alongside further data in this study

Fractyl plans to aim for a treatment label specifically in type 2 diabetes patients with NAFLD/NASH, indications that are both related to metabolic dysfunction and commonly co-exist in the same patient. At least 40% – and possibly as high as 80% – of T2 diabetes patients have NAFLD as a comorbidity, according to the NIH's National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK).

"Our type 2 diabetes trials are designed to investigate not just the effects of the treatment on blood sugar, but also its effects on other aspects of metabolic syndrome, most notably the effect that it has on liver fat. Patients with type 2 diabetes are at particularly high risk of downstream liver and other metabolic complications," Harith Rajagopalan, co-founder and CEO of Fractyl, told BioWorld MedTech.

Fractyl expects to have data soon from two randomized, sham-controlled trials: Revita 2 in type 2 patients on oral agents and the investigator-backed study Domino in women with insulin resistance and polycystic ovarian syndrome (PCOS). Revita 2 is slated to report this summer, while Domino data will be out in the fall. The startup also is currently enrolling a U.S. pilot study; after that completes, Fractyl plans to file with the FDA for a pivotal U.S. study around year end.

The Revita DMR system already received a CE mark in 2016. It works by resurfacing the inside of the duodenum, which is the upper part of the small intestine. The procedure is thought to work because the duodenum thickens, changing texture and altering the microbiome, with the high fat and high sugar diet that is characteristic of populations in the most economically developed countries.

It was originally developed after anecdotal observations that bariatric surgery patients were experiencing significant blood glucose reduction, often preceding or irrespective of subsequent weight loss. The outpatient DMR procedure could offer a viable option for type 2 diabetes patients who are unwilling to submit to bariatric surgery; and the procedure itself has the potential to be repeatable, if its effects diminish over time and/or with the resumption of poor dietary habits.

INSPIRE data

"Other than extreme interventions, this is the first same-day treatment that has the potential to free patients with advanced type 2 diabetes from daily insulin injections," said Jacques Bergman, a professor of gastroenterology at Amsterdam UMC and principal investigator of the INSPIRE study. "Our results suggest we can use a straightforward and safe outpatient procedure to eliminate the need for daily insulin, which could have a meaningful positive impact on the hundreds of millions of people across the world suffering from type 2 diabetes."

The results just presented at ADA were for the 16-patient INSPIRE study, which focused on T2 diabetes patients who have used long-acting insulin for more than two years. The pilot study found that six-months after Fractyl's DMR procedure, 13 of the 16 patients were insulin-free. Management with a once-daily or one-weekly GLP-1 subcutaneous injection was sufficient to manage blood glucose levels.

Novo Nordisk A/S, of Bagsværd, Denmark, also recently submitted to the FDA for the first oral version of GLP-1 agonist semaglutide. That could offer the prospect of transitioning many type 2 diabetes patients who currently require intensive glucose monitoring and management with multiple-daily insulin injections instead to an outpatient procedure followed by a single daily GLP-1 oral medication.

The INSPIRE pilot study also found an average reduction of liver fat of almost 45%, from a baseline of 8.5% liver fat as measured by an MRI-PDF, alongside improvements in blood pressure and weight reduction.

Mechanism of action

Fractyl is preparing to submit a publication on its preclinical research to better elucidate the mechanism of action at work in DMR, which is slated to come out later this year. The system has already been used in more than 200 patients; it was well-tolerated and has shown sustained improvements in blood glucose levels, insulin resistance measures, liver fat, cardiovascular risk markers and weight loss, unaided by any lifestyle changes through one year of follow-up.

"We've been doing a lot of work to try to understand on a detailed molecular, cellular level what is actually changing in the duodenum in response to high-fat and high-sugar diets. That may be contributing to the cause of metabolic syndrome and insulin resistance," said Rajagopalan.

He continued, "We've been working with leading scientific experts and it dovetails very nicely with a growing body of evidence from investigators all around the world that high fat and sugar diets actually cause changes to the intestinal lining and the microbiome, and that there are changes that are occurring in the duodenum that seem to be intimately associated with insulin resistance. And we believe that our therapy is beginning to show evidence that we are reversing these processes."

Fractyl hasn't done a financing since a $44 million series D round in November 2017. The company has an impressive and deep-pocketed syndicate; that round was led by an undisclosed new investor and joined by new investors GV, True Ventures, and IDO Investments. Existing investors included General Catalyst, Bessemer Venture Partners, Domain Associates, Mithril Capital Management, Emergent Medical Partners and Deerfield Management.

Rajagopalan declined to comment on Fractyl's current fundraising status, but an additional cash infusion seems likely to precede a costly U.S. pivotal trial. With a few crossover investors already in its syndicate, the startup may be weighing when to test the IPO waters.

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