Fractyl Health initiated with an Outperform at Evercore ISI

Evercore ISI initiated coverage of Fractyl Health (GUTS) with an Outperform rating. Amid the GLP-1 craze, the incumbents have made “moves that you normally wouldn’t expect” and the fact that “a savvy company” like Eli Lilly (LLY) was interested in a drug like Versanis’ bimagrumab “tells you that incumbents are super focused on their competitive moat,” the analyst tells investors. A device maker like Fractyl is delivering a GLP-1 gene therapy straight into the pancreas, thereby limiting issues in the liver and other off target effects, and the reason they can do that is because of the duodenal ablation device they’ve been working on for 10-plus years, adds the analyst, who says “This one will be an execution and show me story.”