1. Structure Therapeutics Inc. (NASDAQ:GPCR)
Average Upside Potential: 136.77%
Number of Hedge Fund Holders: 43
Structure Therapeutics Inc. (NASDAQ:GPCR) is a clinical-stage global biopharmaceutical company developing novel oral small molecule therapeutics for metabolic and cardiopulmonary diseases, focused on G-protein coupled receptors (GPCRs) as a therapeutic target class.
Despite reporting a loss per share of $0.18 in Q2 2024, the company exceeded earnings expectations in 3 out of the last 4 quarters. Its robust pipeline of innovative drug candidates positions it for significant growth in the obesity and diabetes markets. It has 4 approved products: Crysvita for X-linked hypophosphatemia and tumor-induced osteomalacia, Mepsevii for mucopolysaccharidosis VII, Dojolvi for long-chain fatty acid oxidation disorders, and Evkeeza for homozygous familial hypercholesterolemia. It’s a promising company in the obesity treatment market with GSBR-1290, an oral GLP-1 agonist.
It recently announced positive results from phase IIa studies of its obesity drug GSBR-1290. The drug showed promising results in reducing weight and has the potential to become a leading oral treatment for obesity. Based on these results, Structure Therapeutics Inc. (NASDAQ:GPCR) plans to start a larger phase IIb study in Q4 2024. With the potential to disrupt the $100 billion GLP-1 agonist market, Structure Therapeutics is well-positioned for significant growth.
This is a promising clinical-stage biopharmaceutical company developing innovative treatments for various diseases. With a strong pipeline of drug candidates and a focus on addressing significant unmet medical needs, the company is well-positioned for future growth and success.
Baron Health Care Fund stated the following regarding Structure Therapeutics Inc. (NASDAQ:GPCR) in its fourth quarter 2023 investor letter:
“Structure Therapeutics Inc. (NASDAQ:GPCR) is a biotechnology company dedicated to making oral small molecule medicines to target the obesity and diabetes market. Recent share weakness has been due to two large pharmaceutical acquisitions in the space: Roche’s purchase of Carmot and AstraZeneca’s in-licensing of Eccogene’s GLP-1 asset. These developments were followed by updates from Structure that implied it had a promising asset, but it might be inferior to Eli Lilly’s first-in-class product. Shares fell as analysts reduced the probability of success surrounding potential peak sales. We think it is too early to reach a final conclusion on the company’s oral small molecule GLP-1, as these data sets are limited in total sample size, and there are compelling arguments for both sides. Given how quickly this space changes and our smaller position sizing due to the aforementioned dynamics, we are monitoring our position and making decisions based on our evolving analysis.
We initiated a small position in Structure Therapeutics Inc., a clinical-stage biotechnology company. Structure is developing an oral small molecule GLP-1 with once daily dosing. We think the GLP-1 class of obesity/diabetes drugs has the potential to be the largest drug class ever and that parts of the market will be particularly well suited to oral medications. Some people find oral medications more convenient than injectables, and oral small molecule drugs are cheaper and easier to manufacture than injectables, which could allow for lower pricing and greater access, particularly in international markets. Structure’s drug is still in its early phase of development, but there is reason to think that it could be successful. The drug was designed through the company’s structure-based drug discovery platform and was designed to selectively activate the G-protein signaling pathway, which should lead to a better efficacy/safety profile. In late September, Structure announced promising results from a Phase 1 multiple ascending dose study in non-diabetic overweight/obese individuals. Although there were only a few patients in the study, the drug impressively demonstrated reductions in mean body weight of up to 4.9% placebo-adjusted after 28 days, which would suggest a best-in-class profile. Then, in December, Structure announced results from its Phase 2a study, including a diabetic cohort and a non-diabetic overweight/obese cohort. The interim data from the obesity cohort continued to look competitive with 4.7% placebo-adjusted weight loss after 56 days. The diabetes data was somewhat underwhelming, with a 1.0% placebo-adjusted HbA1c reduction and 3.3% to 3.5% placebo-adjusted weight loss over 84 days (in comparison, Lilly’s orforglipron showed a 1.5% to 1.7% HbA1c reduction and 4.1% to 6.3% placebo-adjusted weight loss in a similar study). Structure is planning to study additional doses and titration regimens to optimize the drug’s profile in diabetes. Overall, we would characterize the early data as supportive of an active GLP-1 drug that has the potential to be among the leaders in the category. At this point we have a small position in the stock while we await more data to evaluate the competitiveness of Structure’s drug.”
While we acknowledge the growth potential of GPCR, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GPCR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
