Rethinking Diabetes: Endogenex's Gut Therapy Draws $138M in Funding

MINNEAPOLIS, MN – March 25, 2026 – Medical technology firm Endogenex has secured a significant financial boost in its quest to revolutionize type 2 diabetes (T2D) treatment, closing a $50 million extension of its Series C financing. The new funding, led by newcomer Arboretum Ventures with participation from existing investors, brings the company's total Series C round to an impressive $138 million.

The capital infusion is earmarked to propel the company's ReCET System through a pivotal clinical trial and toward potential FDA approval. The system represents a paradigm shift in diabetes care, moving beyond daily medications and symptom management to target what a growing body of evidence suggests may be a root cause of the disease: a dysfunctional gut.

"This financing puts us in a strong position to complete our pivotal study and take the ReCET System through FDA approval," said Stacey Pugh, CEO of Endogenex, in a statement. "We believe that is because an important part of the disease has gone untreated: the gut. By restoring the duodenum to a healthier state, we aim to help patients do more than manage their symptoms. We want to potentially alter their disease progression."

A New Frontier: Targeting the Gut's Role in Diabetes

For decades, T2D treatment has focused on managing blood sugar through lifestyle changes, oral medications, and injectable therapies. Endogenex is pioneering a different approach, based on the scientific hypothesis that the upper intestine is a key player in metabolic disease.

Their focus is on the duodenum, the first section of the small intestine. Research indicates that in many individuals with T2D, this area becomes inflamed and dysfunctional—a condition known as "type 2 diabetic duodenopathy." This inflammation disrupts the gut's ability to communicate with the pancreas, liver, and brain, interfering with the body's natural regulation of blood sugar, appetite, and metabolism.

The Endogenex procedure is a minimally invasive, outpatient endoscopic therapy designed to directly address this pathology. During the procedure, a specialized catheter delivers highly controlled, non-thermal pulsed electric fields (PEF) to the lining of the duodenum. This energy application is designed to gently remove the inflamed, dysfunctional cells, triggering the body's natural regenerative processes to replace them with new, healthy tissue. The entire process aims to "re-cellularize" the duodenum, restoring its ability to function as a critical metabolic signaling center.

This approach stands in stark contrast to current pharmaceutical interventions and offers a less invasive alternative to bariatric surgery, which, while effective for T2D remission, is a major operation reserved for a specific patient population.

Big Bet on a Breakthrough: Investor Confidence and Market Need

The $138 million Series C round signifies strong investor confidence in this novel approach. The decision by Arboretum Ventures, a venture capital firm with a deep history in healthcare, to lead the latest funding round is a powerful endorsement.

"As a gastroenterologist, I recognize the scientific rationale of targeting the duodenum as a likely contributor to Type 2 Diabetes," noted Dr. Tom Shehab, Managing Partner at Arboretum Ventures. "The ReCET System represents a compelling and important new tool for a disease that affects hundreds of millions of people worldwide."

That market is immense and continues to grow. Globally, nearly 600 million adults are living with diabetes, with T2D accounting for over 90% of cases. That number is projected to exceed 850 million by 2050. The global market for diabetes care devices is already valued at over $50 billion and is expected to expand significantly, reflecting the urgent need for more effective solutions.

Even with the advent of powerful drugs like GLP-1 agonists (e.g., Ozempic) and SGLT2 inhibitors, a large unmet need persists. Many patients fail to achieve adequate glycemic control, struggle with side effects, or find their disease continues to progress despite medication. Endogenex is betting that by addressing the underlying gut pathology, its ReCET System can offer a durable solution for this population.

The Path to Approval: Rigorous Science and Regulatory Tailwinds

With capital secured, the company's full attention is on the ReCET Clinical Study, a large-scale trial designed to provide definitive proof of the system's safety and effectiveness. The study's design is considered the gold standard in clinical research: it is a multicenter, prospective, randomized, double-blinded, and sham-controlled trial.

This means that participants, who are being enrolled across sites in the United States and Australia, will be randomly assigned to receive either the actual ReCET therapy or a sham procedure. Neither the patients nor their primary study doctors will know which treatment was administered until key endpoints are reached. This rigorous design is essential to eliminate placebo effects and provide regulators with high-quality, unbiased data.

The U.S. Food and Drug Administration (FDA) has already signaled its recognition of the technology's potential. In November 2023, the agency granted an Investigational Device Exemption (IDE) to allow the pivotal study to proceed. Furthermore, the ReCET System has received FDA Breakthrough Device Designation, a status reserved for technologies that may provide more effective treatment for life-threatening or irreversibly debilitating conditions. This designation provides Endogenex with an expedited regulatory pathway and more frequent communication with the FDA, potentially accelerating its journey to market.

Founded in partnership with the renowned Mayo Clinic, which remains an investor, Endogenex is built on a foundation of deep scientific and clinical expertise. As the ReCET study progresses, the medical community will be watching closely. For the millions of patients whose lives are constrained by type 2 diabetes, the promise of a therapy that could potentially halt or even reverse the course of their disease offers a profound new source of hope.