Structure Therapeutics said Friday its experimental pill helped patients lose more than 5% of their body weight, sending the small biotech stock rocketing by more than a third.
The company is a newcomer in the weight-loss drugs race and held its initial public offering just seven months ago. But Structure is looking to take on behemoths Novo Nordisk and Eli Lilly, which make obesity treatments that have either been approved or are vying for approval.
At the highest dose, patients who took Structure's daily pill for four weeks lost 5.4% of their body weight. That was 4.9% more weight loss than the placebo group. Structure tested its weight-loss drug in overweight patients or those with obesity, but not diabetes. On the back of the promising test results, Structure announced a $300 million private-equity placement.
"The data more than addresses some investor concerns that it has a questionable half-life because it is clearly a once-daily drug in our view," Leerink Partners analyst David Risinger said in a note to clients.
On the stock market today, biotech stock Structure catapulted 34.6% to 50.42. Shares broke out of a cup base with a buy point at 42.55, according to MarketSmith.com.
Biotech Stocks And The Weight-Loss Battle
Experts say a pill option in obesity treatment could be appealing to needle-phobic patients.
Like Structure, Lilly, Novo and Pfizer are testing their own oral medicines in the GLP-1 drug class. Risinger, the Leerink analyst, says the Structure results compare favorably with Lilly's daily pill, orforglipron. Evercore ISI analyst Umer Raffat says Structure's results look "very competitive."
In Lilly's Phase 1 study, patients who took the max 24-milligram dose lost 3.6% more body weight than placebo recipients, Risinger said. One patient taking the lowest dose discontinued treatment due to nausea, a common side effect of drugs in the GLP-1 class.
Bullishly for biotech stock Structure, none of the patients in its study dropped out due to side effects. The majority of the side effects were mild and in line with the gastrointestinal problems tied to GLP-1 weight-loss drugs. The most common side effects, nausea and vomiting, occurred more often in the 60- and 90-milligram dosing groups, Structure said in a news release.
Importantly, Structure plans to test a higher 120-milligram dose in its Phase 2 study of patients without diabetes. In comparison, the highest dose in Lilly's Phase 2 study of orforglipron was 45 milligrams. That led to 14.7% weight loss after 36 weeks.
Risinger kept his outperform rating on Structure stock.
Today, the biotech stock has a strong Relative Strength Rating of 93, putting it in the top 7% of all stocks when it comes to 12-month performance, according to IBD Digital.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
