Drug Company GPCR Skyrocked 33% This Year, A Trendy Bubble？
The stock price of $STRUCTURE THERAPEUTICS INC SPON ADS EACH REP 3 ORD(GPCR)$ , a US weight-loss drug company, has skyrocketed 33% this year.
The reason is its research projects suggests that weight-loss candidate could potentially overshadow the most popular weight-loss products on the market, like Wegovy from $Novo-Nordisk A/S(NVO)$ and Zepbound from $Eli Lilly(LLY)$.
But is this recent surge in GPCR's stock price mainly driven by market sentiment, or does the company truly possess competitive edge in the weight-loss market?
Products Performance
GSBR-1290, Structure's obesity drug, is the company's most advanced candidate. And the results from its 2a clinical trial showed even better weight-loss effects.
After 12 weeks of treatment, patients saw an average weight loss of 6.2% after placebo adjustment. Compare that to Wegovy's 12.4% weight loss after 68 weeks and Zepbound's 15% after 72 weeks.
On the safety, only 5.4% of patients discontinued treatment due to side effects, slightly higher than Wegovy's 4.5%, but still pretty tolerable. Plus, while all three drugs target the GLP-1 receptor, Wegovy and Zepbound require weekly injections, but GSBR-1290 is a daily pill, making it more convenient.
The 2b trial for GSBR-1290 is set to start in the fourth quarter of this year.
Approval Is Key
Structure is a pre-revenue company, meaning its candidates could shape the company's future. But its current financial situation and funding ability are crucial for its survival.
As of the end of the first quarter, the company had over $436 million in cash, cash equivalents, and short term investments. Research and development expenses were under $21 million for the same period, and there's no long-term debt. So, funding for GSBR-1290's upcoming clinical trials and commercialization infrastructure shouldn't be a problem.
Still, on June 3rd, Structure announced a new stock and pre-funded warrant issuance plan. The total proceeds are unknown, but management aims to raise cash for at least one or two years. In short, the company will have more money in its pocket.
Right now, GPCR stock is in a bullish mood. If approved, it has the potential to capture a significant market share. But clinical trial setbacks, especially safety risks, could still cause a sharp drop in its stock price. If you can stomach that risk, GPCR offers plenty of upside potential.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
