(Reuters) – Obesity and diabetes drug developer Fractyl Health on Thursday priced its U.S. initial public offering (IPO) below an indicated range to raise $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, below the indicated range of $16 to $18.

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.

(Reporting by Surbhi Misra in Bengaluru; Editing by Subhranshu Sahu)

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