aprott Shares of GLP-1 concern Structure Therapeutics Inc. (NASDAQ:GPCR) rallied over 50% after updated data suggests that its GSBR-1290 can compete with other oral GLP-1R clinical rivals. That said, its efficacy at week 12 is far below that demonstrated by Novo Nordisk’s (NVO) next-generation oral dual (GLP-1 and amylin) agonist amycretin. The secondary offering met by this rally merited a deeper dive into both Structure and the entire obesity treatment landscape. An analysis follows below. Seeking Company Overview: Structure Therapeutics Inc. is a Cayman Islands domiciled, South San Francisco headquartered clinical-stage biotechnology concern focused on the development of medications that leverage its oral small molecule platform to treat chronic disease. The company is advancing one program, GSBR-1290, for the treatment of type II diabetes and obesity. Structure was founded in 2016 and went public in February 2023, raising net proceeds of $166.7 million at $15 per American depository share (ADS). After posting positive data on GSBR-1290 and announcing a secondary offering on June 3rd, its stock closed the June 4, 2024, trading session at $54.29. The stock now trades just below $52.00 a share, with an approximate market cap of just under $3 billion. June 2024 Company Presentation GSBR-1290 Although the company is discovering and conducting preclinical work on other compounds, all the market currently cares about is GSBR-1290 and its pursuit of the white-hot obesity indication, currently dominated by two glucagon-like-peptide-1 (GLP-1) agonist therapies. With potential mega-blockbuster sales at stake, Structure, like its clinical rivals, is trying to distinguish its candidate from the field first and foremost as an oral alternative, whereas the currently approved therapies are subcutaneously injected. GSBR-1290 is also a biased G-protein coupled receptor agonist, designed to activate the G-protein pathway by targeting the GLP-1 receptor (GLP-1R) without β-arrestin signaling, avoiding receptor internalization and desensitization, which should promote greater weight loss and glycemic control, as well as a more favorable tolerability profile. June 2024 Company Presentation With many rightly believing that Americans suffering from obesity would rather take a once-daily pill or capsule as opposed to a once-weekly subcutaneous injection, efficacy data only need to be equal to or slightly inferior for the market to react positively. That said, GSBR-1290 clinical results to date have set Structure Therapeutics investors on a wild rollercoaster ride. Obesity Treatment Landscape To put GSBR-1290’s results and the market’s reactions to them into proper context, it is best to lay out the competitive landscape for obesity. With the introduction of GLP-1 type II diabetes medications that produced a ‘side effect’ of weight loss, obesity meds are expected to surge from a $2.4 billion global treatment market in 2022 to as much as $130 billion by 2030, according to Goldman Sachs. It is currently dominated by Danish pharma Novo Nordisk’s Wegovy (semaglutide) (2023 sales of ~$3.0 billion) and Saxenda (liraglutide) (~$989 million), not to mention off-label prescriptions for its slightly lower dosage semaglutide in the form of wildly popular type II diabetes med Ozempic (~$9.2 billion). The same dynamic applies to Eli Lilly’s (LLY) dual GLP-1/glucose-dependent insulinotropic polypeptide (GIP) agonist Zepbound (tirzepatide), which generated 1Q24 sales of $517 million – its first full quarter on the market – and its type II diabetes twin Mounjaro, responsible for FY23 sales of $5.2 billion, its first full year on the market. That said, all of these meds are once-weekly subcutaneous injections that promote muscle loss as a side effect. Regarding the rapidly evolving clinical landscape, the traits that matter most for differentiation are efficacy, muscle vs fat loss, administration protocol, and safety/tolerability – the latter may best be measured by discontinuation rates. Novo and Lilly are not resting on their laurels, both attempting to expand indications for their approved products, while advancing several next-generation and/or oral weight loss candidates through the clinic. Novo’s next-gen injectable is CagriSema, a once-weekly subcutaneous combination of glycemic regulating hormone amylin analog cagrilintide and Wegovy peptide semaglutide. After producing 15.6% weight loss at week 32 in 80 overweight type II diabetes patients in a Phase 2 study versus 5.1% for Wegovy, CagriSema is being pitted against Lilly’s Zepbound in an 800-patient, 72-week Phase 3 study, which should produce data in 2H24. Please keep in mind that all the studies are not apples-to-apples due to many gating factors, most notably body mass index thresholds and type II diabetes status. That said, CagriSema’s once-daily oral cousin, dual GLP-1 and amylin agonist amycretin demonstrated 13.1% weight reduction at week 12 in a Phase 1 study that was read out in March 2024. Novo declared it “safe and effective” in late January 2024, although that account lacked details. It is entering Phase 2 evaluation in 2H24 for type II diabetes, but clearly weight loss will be an intensely watched endpoint. It is possible that the type II weight loss data will be employed to advance amycretin straight to a pivotal obesity study. The Danish concern also initiated two 36-week Phase 2 studies for what it dubbed, “subcutaneous once-weekly dual GIP/GLP-1 agonist” – without getting more specific, in March 2024. As for Lilly, it has two candidates undergoing Phase 3 evaluation and another three in Phase 2 studies. Keeping to its late-stage assets, subcutaneous triple (GIP/GLP-1/glucagon RA) agonist retatrutide demonstrated an eye-popping 24% weight reduction (58 pounds) at week 48 in a Phase 2 study and is being advanced into Phase 3 evaluation. It did have a somewhat concerning 16% drop out rate, but Lilly seemed to think that could be improved by tweaking its titration. Its other Phase 3 asset is orforglipron, an oral GLP-1R agonist that generated 14.7% loss at 36 weeks in a Phase 2 study that read out in 2023. It entered late-stage evaluation in a 2,620-participant open-label study comparing it to insulin across obesity, type II diabetes, cardiovascular disease, and chronic kidney disease indications. Boehringer Ingelheim and Zealand Pharma’s (ZEAL:Copenhagen) once-weekly subcutaneously administered survodutide dose-dependently reduced body weight in a Phase 2 study, with the 4.8 mg dose (n=77) achieving an 18.7% reduction at week 46. However, due to GI issues, the 4.8 mg dose had a discontinuation rate of 28.6%. Two 600-patient Phase 3 trials (SYCHRONIZE-1 and 2) should start enrolling patients in 2H24. One will assess patients with obesity and type II diabetes, and the other will evaluate patients with obesity and no type II diabetes. Both will be randomized 1:1:1 for 3.6 mg or 6.0 mg of survodutide or placebo. Amgen’s (AMGN) MariTide (maridebart cafraglutide) is a bispecific molecule that conjugates monoclonal anti-human glucose-dependent insulinotropic polypeptide receptor (“GIPR”) antagonist antibody to two GLP-1 analogue agonist peptides employing amino acid linkers. Phase 1 data suggests that MariTide is superior to Novo Nordisk’s (NVO) Wegovy (semaglutide) and Eli Lilly’s (LLY) Zepbound (tirzepatide). In a dose-finding trial, Amgen’s bispecific was able to produce mean body weight loss of 14.5% by day 85 versus 1.5% for placebo. By comparison, Wegovy and Zepbound users experienced 15% and 21% weight losses (respectively) after one year. Although subcutaneously administered, MariTide possesses a longer half-life than both Wegovy and Zepbound, suggesting monthly or (possibly) less frequent dosing. Also, maximum weight loss with MariTide was sustained for two months after the last dose, which implied superiority to both Wegovy, whose users regained two-thirds of their weight loss one year after the last dose, and Zepbound, whose patients experienced a 14% weight regain over the same period. Top-line 52-week, 11-arm Phase 2 data are expected in late 2024. Amgen axed its oral obesity med (AMG 786) after examining Phase 1 data in early May 2024. Roche (OTCQX:RHHBY) entered the space when it purchased Carmot Therapeutics and its once-weekly injectable GLP-1/GIP CT-388 program for $2.7 billion before it could conduct an IPO in December 2023. CT-388 is similar to Structure’s GSBR-1290 in that it aims to minimize recruitment of β-arrestin to either receptor. Roche’s gamble has produced positive early returns, treating pre-diabetic and otherwise healthy patients with obesity in a Phase 1b study. At 24 weeks, the candidate demonstrated mean placebo-adjusted weight loss of 18.8% (p<0.001), while all pre-diabetics achieved normal blood sugar levels. Additional data from a type II diabetes cohort is expected to be read out in 2H24. Roche’s ultimate goal is to pair CT-388 with its muscle strengthening antibody (RO7204239) to produce weight loss without muscle loss. Viking Therapeutics (VKTX) once-weekly, subcutaneously administered dual GLP-1/GIP agonist VK2735 was shown to decrease mean body weight (placebo-adjusted) by up to 13.1% (14.7% from baseline) (titrated to 15mg cohort; n=35; p<0.0001) at 13 weeks in a Phase 2 trial, although all four dose cohorts demonstrated significant separation (p<0.0001) from placebo in a dose-dependent manner. Just as significant: no plateau was observed, meaning that if the study had continued, so likely would have the weight loss. As for a discontinuation rate, VK2735’s was somewhat elevated, although at 13%, it was essentially equal to placebo (14%). Viking Company Presentation Viking’s oral version of VK2735 demonstrated proof-of-concept with dose dependent body weight reductions at day 28, with its highest dose (40 mg titrated from 20 mg) returning a mean 5.3% drop in weight (3.3% decline placebo adjusted). Only 2 of 37 (5%) trial participants discontinued early, albeit it was only 28 days. That said, its adverse event [AE] profile was mild overall and similar to placebo, with no serious AEs reported. A Phase 2 study is expected to commence in 2H24. Altimmune, Inc. (ALT) believes it possesses a candidate with delineation – at least versus the approved therapies – based on its once-weekly, subcutaneously administered pemvidutide’s Phase 2 trial results. In that placebo-controlled, four-treatment-arm, 391-participant study, mean weight loss of 15.6% was achieved at week 48 in the highest dose cohort (2.4 mg weekly), with no signs of bottoming out. That compares favorably to Wegovy 2.4 mg (15.6% at week 68; ~15% at week 48) and unfavorably to Zepbound 15mg (22.5% at week 72; ~18% at week 48). The differentiation came in cardiac risk, with LDL cholesterol falling 9.9% for the 2.4 mg dose (11.2% for the 1.8 mg dose) versus 7.1% at week 72 for Zepbound and 2.5% at week 68 for Wegovy. However, the results were not all rosy for pemvidutide, with discontinuation rates due to treatment-related AEs at 16.2% and 15.5% in the top two dose cohorts at 48 weeks, which was significantly higher than the top dosages for Wegovy (6.8%) or Zepbound (6.7%). That said, the discontinuation rates may have been a function of little to no titration for its top doses versus 16- and 20-week ramps to target doses for the approved therapies, respectively. Altimmune November Company Presentation Also of note, only 25.5% of the weight loss achieved by pemvidutide was lean mass. This compared favorably to Wegovy, from which ~40% of weight loss was lean mass. As for Zepbound, attempting to extrapolate is challenging, but was likely ~25% lean mass weight loss. Altimmune expects to commence a Phase 3 trial after huddling with the FDA for an end of Phase 2 meeting in 2H24. AstraZeneca (AZN) is advancing long-acting amylin AZD6234 in a Phase 1 study that commenced in 4Q22. This effort comes on the heels of the discontinuation of its GLP-1 agonist AXD0186 in June 2023 after a preliminary snapshot of Phase 1 data did not provide any indication of clear superiority in efficacy. It also added ex-China rights to Eccogene’s oral GLP-1 for $185 million upfront in November 2023. That said, AstraZeneca is trying to position itself in the weight management (versus weight loss) space, which will likely be dependent upon its candidates creating less muscle loss. Along those lines, Regeneron (REGN) is slated to initiate a Phase 2 trial in mid-2024 assessing its anti-muscle atrophy monoclonal antibody trevogrumab paired to Wegovy with and without its bone disease candidate garetosmab in an attempt to improve the quality of weight loss in patients after stopping Wegovy. Pfizer (PFE) has been active and largely unsuccessful in the space, discontinuing its once-daily oral GLP-1R agonist lotiglipron in June 2023 due to elevated liver enzymes. Phase 2 data on its twice-daily oral GLP-1 danuglipron demonstrated placebo-beating efficacy, but dose-dependent discontinuation rates were north of 50% (40% for placebo). A once-daily version of danuglipron is undergoing Phase 2 evaluation, with data expected in mid-2024. If the behemoth continues to be unsuccessful, look for it to buy into the space, with Viking a potential target. Terns Pharmaceuticals’ (TERN) oral GLP-1R agonist TERN-601 is undergoing Phase 1 evaluation with top-line data (28-day proof-of-concept) due in 2H24. Now Back to GSBR-1290… With that as a thorough yet incomplete rundown of the obesity landscape, oral GSBR-1290 is undergoing evaluation as both a tablet and capsule in a placebo-controlled 118-patient Phase 2a study. Interim data, readout in December 2023 demonstrated 12-week placebo-adjusted weight reductions between 3.26% and 3.51%. Even though the 8-week data at the highest dose (120 mg) demonstrated a 4.74% placebo-adjusted weight drop, the market hated the news, selling Structure’s stock off 43% to $33.83 a share in the subsequent trading session. Fortunes changed when updated results were released on June 3, 2024, with essentially four dosing cohorts demonstrating placebo-adjusted weight loss between 6.2% and 6.9% at week 12, keeping it in the race with Lilly’s orforglipron, the 45 mg dose of which produced a 6.5% drop in placebo-adjusted weight at week 12. The 120 mg capsule form (n=37) had two treatment-related discontinuations (5%), whereas the tablet form (n=45) exhibited an 11% dropout rate. However, it did not come close to oral amycretin’s 13.1% reduction at week 12. June 2024 Company Presentation The market didn’t seem to care, rallying shares of GPCR 54% to $52.74 in the subsequent (June 3, 2024) trading session. Balance Sheet & Analyst Commentary: Structure elected to leverage this reaction into a capital raise featuring ADSs and prefunded warrants, announced after the close of market on the 3rd. Before the raise, the company held cash and investments totaling $436.4 million and no debt on March 31, 2024. Post raise, it should have an operating runway well into 2027. The Street is unanimously onboard with GSBR-1290 and Structure, featuring nine buy or outperform ratings and a mean price objective of $79, which might move higher (or lower) on the back of its updated Phase 2a data and contemporaneous capital raise. Verdict: The review of the obesity market would suggest that Novo and Lilly intend to defend their respective turf zealously, and have very compelling therapies in the clinic to do so. Admittedly with a different approach, plenty of patients to dose before approval, and little meaningful tolerability information forthcoming from Novo to date, oral amycretin’s clear superiority in efficacy (to date) makes the path to justifying Structure Therapeutics Inc.’s valuation perilous. And with Viking’s oral VK2735 and Lilly’s orforglipron, it represents just one of three strong oral rivals in the clinic. Therefore, Structure Therapeutics Inc. stock seems to be an avoid after its big recent move up. Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.