Structure Therapeutics (GPCR) is a clinical-stage biopharma company that went public in 2023. Valued at $1.7 billion by market cap, Structure Therapeutics is focused on developing oral treatments for chronic metabolic and cardiopulmonary conditions. It utilizes a structure-based drug discovery platform, allowing the company to establish a G-protein coupled receptors (GPCR) targeted pipelines, that features two clinical-stage small molecule compounds designed to surpass limitations associated with traditional biologic and peptide therapies.
Today, GPCR stock trades roughly 50% below all-time highs, allowing you to buy the dip. Let’s see why Wall Street is bullish on this healthcare stock in 2024.
The Bull Case for GPCR Stock
Pre-revenue biotech companies are volatile, as they remain vulnerable to data associated with clinical trials that can either please investors - or disappoint them. For instance, shares of Structure Therapeutics fell by nearly 43% in a single trading session in December after it published clinical trial data that was not well received by Wall Street.
However, the trial was not a complete disaster, as Structure Therapeutics emphasized it “achieved the objectives of our first Phase 2a clinical trial of GSBR-1290 in T2DM patients which were to demonstrate favorable safety, tolerability and efficacy results and guide our plans to further optimize the already encouraging performance of GSBR-1290.”
GSBR-1290 is a weight-loss drug that aims to treat diabetes and obesity. In recent years, weight-loss medicines such as Ozempic and Mounjaro, manufactured by Novo Nordisk (NVO) and Eli Lilly (LLY), respectively, have gained popularity, and are expected to be major revenue drivers for these healthcare giants in the next 10 years.
However, unlike the two medicines mentioned above, which are injections, Structure's GSBR-1290 is a pill - making it comparatively more appealing to patients.
Structure’s phase 2 data for the GSBR-1290 indicates patients treated for obesity lost between 3.3% and 3.5% of their body weight after 12 weeks or three months of treatment. The full data set for the trial should be published in the next two months, and will be closely watched by investors.
What Is the Target Price for GPCR Stock?
GPCR ended Q4 with $467 million in cash, while operating expenses totaled $102.8 million. Given its cash burn rates in the last four quarters, this suggests the company has enough liquidity to get through the end of 2027, which indicates it has the leeway to run into minor setbacks with clinical trials in the near term.
Each of the eight analysts tracking GPCR has a “strong buy” rating on the stock. The mean target price is $80.50, indicating an upside potential of more than 117% from current levels.
Investment research firm Cantor Fitzgerald recently initiated coverage of Structure Therapeutics with an overweight rating due to the company’s upcoming results and reasonable valuation. According to Cantor, the trial data for GSBR-1290 should be similar to or slightly better for weight loss than orforglipron, Eli Lilly’s weight-loss drug in the clinical trial stage.
Cantor has a price target of $65 for GPCR stock, more than 75% north of Wednesday's close.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
