We recently compiled a list of the 12 NASDAQ Stocks with Biggest Upside Potential According to Analysts. In this article, we are going to take a look at where Structure Therapeutics Inc. (NASDAQ:GPCR) stands against the other NASDAQ stocks.
Potomac Wealth Advisors president Mark Avallone joined CNBC’s ‘The Exchange’ on November 16 to discuss where he sees investing opportunities following Trump’s election. He believes investing in the tech sector makes the most sense given the implications of the 2024 election results for the financial markets. He noted that the election has shifted the underlying dynamics affecting businesses, particularly regarding regulation and taxation. The new administration has changed the previous climate of heightened regulation and discussions around increasing capital gains and corporate taxes. Avallone believes that the potential for reduced regulation and lower taxes on corporations could create a more favorable environment for business growth.
He emphasized that corporate America’s ability to deliver earnings will be crucial, relying on continued efficiencies and advancements in technology. This perspective supports his thesis that investing in technology remains a sound strategy for investors. When discussing specific stocks, Avallone highlighted major tech companies from the MAG7 as particularly attractive. He expressed confidence that the current administration would foster a more supportive environment for these companies, allowing them to thrive.
Avallone also touched on the defense sector, which has historically benefited from global conflicts. He pointed out that defense companies have shown resilience and believes that ongoing global tensions will sustain demand for defense stocks, providing a hedge against market volatility.
However, Avallone expressed caution regarding the healthcare sector, which has been lagging due to heavy regulation and political scrutiny. He noted that despite an aging population driving demand for medical equipment, regulatory pressures have hindered growth in this area. Overall, his analysis underscores a cautious optimism about investing in technology and defense while highlighting potential challenges within healthcare as businesses navigate the post-election landscape.
Methodology
We sifted through Finviz to compile a list of 30 NASDAQ stocks with high upside potentials. We then selected the 12 stocks with the biggest upside potential according to analysts. The stocks are ranked in ascending order of their analysts’ upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Structure Therapeutics Inc. (NASDAQ:GPCR)
Average Upside Potential as of November 21: 185.26%
Structure Therapeutics Inc. (NASDAQ:GPCR) is a clinical-stage biopharmaceutical company focused on discovering and developing innovative oral treatments for chronic metabolic and pulmonary conditions with significant unmet medical needs. Its lead product candidate, GPCR-01, is an oral therapy aimed at treating obesity and related metabolic disorders.
The company recently announced its third-quarter 2024 financial results and corporate updates. It reported a strong financial position as of September 30, with $915.3 million in cash, cash equivalents, and short-term investments. This substantial funding is projected to sustain operations and key clinical milestones, including all GSBR-1290 studies necessary for Phase 3 readiness, until at least 2027.
It announced positive developments for GSBR-1290. This oral small molecule targets the GLP-1 receptor and holds promise as a treatment for obesity. The company initiated a comprehensive development program for GSBR-1290, which includes two Phase 2 clinical trials: ACCESS and ACCESS II. These studies aim to determine optimal dosing strategies and evaluate the drug’s effectiveness in adults with obesity or overweight and weight-related health problems. The first patients have already been enrolled in the ACCESS trial, with the expectation of including higher dosage groups in ACCESS II by year-end. Topline data from both studies is anticipated in late 2025.
While Structure Therapeutics Inc. (NASDAQ:GPCR) has other programs targeting obesity and related conditions, the focus is clearly on GSBR-1290’s progress. This suggests it’s the company’s most promising candidate at this stage. Overall, this progress reveals that it’s well-positioned for success in the industry.
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.”
Overall GPCR ranks 2nd on our list of the NASDAQ stocks with biggest upside potential according to analysts. While we acknowledge the potential of GPCR as an investment, 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.
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Disclosure: None. This article is originally published at Insider Monkey.
