With the world continuing to pack on pounds, there is an urgent need for effective weight management in an increasingly health-conscious world. According to an industry report, the global weight-loss market is projected to surge to $399.3 billion by 2032, expanding at a compound annual growth rate (CAGR) of 10.3%. The race for the ultimate weight-loss solution is more intense than ever.
Leading the weight-loss gold rush are healthcare giants Novo Nordisk (NVO) and Eli Lilly (LLY) with their injectable GLP-1 drugs, Wegovy and Zepbound. Meanwhile, oral weight-loss drugs are emerging as new darlings of the dieting domain, offering a painless alternative to the sting of injections.
Rising stars Structure Therapeutics Inc. (GPCR) and Viking Therapeutics, Inc. (VKTX) are eager to claim their share of the market, each developing their oral contenders – GSBR-1290 and VK2735 – backed by promising trials that flaunt fat-fighting prowess. With investors’ eyes gleaming at bullish forecasts for both biopharmaceutical companies, which one will clinch the crown? Let’s find out.
The Case For Structure Therapeutics Stock
Based in San Francisco, Structure Therapeutics Inc. (GPCR) is a clinical-stage global biopharma company that develops and delivers novel oral therapeutics to treat a range of chronic diseases with unmet medical needs, including cardiovascular, metabolic, and pulmonary conditions. With a market cap of $2.6 billion, the up-and-coming firm is making waves with its orally administered weight loss pills, which are currently in clinical trials.
GPCR stock went public in February 2023, and has since risen 116.5%. Shares of the biopharma company have surged 69.8% over the past 52 weeks, and 36.3% on a YTD basis - sailing past the returns of the broader S&P 500 Index ($SPX) and the Nasdaq-100 Index ($IUXX) over the same time frames.
Structure Therapeutics Trims Q1 Losses
Structure Therapeutics is a pre-revenue company that reported its Q1 earnings results on May 8, which exceeded Wall Street’s predictions. Despite a net loss of $0.19 per share, the company narrowed this loss by 24% annually, beating estimates by 9.5%.
With $436.4 million in cash, cash equivalents, and short-term investments as of March 31, Structure expects to fund operations through 2026. Its R&D expenses rose by 57.4% annually to $20.7 million, driven by advancements in its GLP-1R franchise and increased personnel costs.
Structure Therapeutics Surges on Weight-Loss Breakthrough
North America leads the weight-loss drugs market, driven by rising obesity and chronic disease concerns. With one-third of U.S. adults classified as obese, the risks of diabetes, heart disease, and hypertension are high, prompting a rising demand for effective, safe weight-loss solutions. Heightened awareness of healthy living has popularized GLP-1 agonists, known for reducing weight and improving metabolic health.
Structure Therapeutics is developing cutting-edge treatments, like amylin receptor agonists and GLP-1R/GIPR combinations for obesity. It aims to select a development candidate by mid-2025 while also exploring ANPA-0073 for muscle-sparing weight loss.
Shares of Structure Therapeutics jumped 54.2% on June 3 following upbeat clinical trial outcomes for its experimental weight-loss pill, GSBR-1290. Patients achieved significant results, shedding an average of 6.2% of body weight over three months in a mid-stage study. That surpassed Wall Street's projections, with one-third experiencing over 10% loss. Another study using a new tablet form showed an average weight loss of 6.9% after 12 weeks of treatment.
Leerink Partners analyst David Risinger believes that, based on the results after three months of treatment, GSBR-1290 "delivers compelling obesity efficacy" and looks comparable to Eli Lilly's experimental weight-loss pill, orforglipron.
JPMorgan (JPM) analysts share this optimism, confident that Structure's oral drug could match orforglipron's efficacy and safety in larger trials. Analyst Hardik Parikh said, "We think the opportunity for oral GLP-1s is underappreciated and think this market could generate $30 billion in sales by 2035." The analyst added that Structure's lead asset, 1290, is a standout, with potential peak sales potentially exceeding $1 billion by 2035.
Analysts remain upbeat about Structure Therapeutics stock, with a unanimous “Strong Buy” rating from the nine analysts in coverage.
The average analyst price target of $78.78 indicates a potential upside of 41.3% from current price levels. However, the Street-high price target of $93 suggests a GPCR stock could rally as much as 66.9%.
The Case For Viking Therapeutics Stock
With a market cap of $6.5 billion, San Diego-based Viking Therapeutics, Inc. (VKTX) is a clinical-stage biopharmaceutical company specializing in therapies for metabolic and endocrine disorders, including Wall Street's current favorite – GLP-1 weight-loss drugs. Founded in 2012, the company's pipeline includes treatments for nonalcoholic steatohepatitis (NASH), obesity, and acute heart failure.
Shares of Viking Therapeutics have climbed 134.5% over the past 52 weeks and 203.1% on a YTD basis, significantly outpacing the returns of the broader indexes, as well as GPCR stock.
Despite these outsized returns, VKTX stock trades 40.8% below its all-time high of $99.41, set in late February. Viking shares are down 38% over the past three months, compared to Structure’s 39% returns over the same period.
Viking Therapeutics Beats Q1 Estimates
Like Structure Therapeutics, Viking is a pre-revenue biopharma company that reported its Q1 earnings results on April 24, topping analysts' earnings expectations. Its loss per share widened 4% year over year to $0.26, but topped estimates by 3.7%.
Viking bolstered its cash reserves to approximately $963 million as of March 31 through a successful secondary stock offering, up from $362 million at the end of 2023. These funds will propel the advancement of its pipeline amid rising R&D and administrative costs.
Viking's Rollercoaster: Advances and Setbacks
In Q1, Viking achieved significant milestones with VK2735, a dual GLP-1/GIP receptor agonist, in obesity treatment, showcasing potential disruption in the market dominated by Zepbound and Wegovy. In phase 2 trials, patients experienced rapid weight loss, shedding 14.7% of body mass in just 13 weeks, and outpacing the year-long timeline for existing treatments.
Furthermore, VK2735 showed sustained efficacy without plateauing, supporting extended treatment durations. VK2735 is developed in both subcutaneous and oral formulations to offer flexibility and convenience to patients. Viking Therapeutics plans a Food and Drug Administration (FDA) meeting to review results and aims to advance formulations into further development by year's end.
Despite promising advancements in the VK2809 program for NASH and fibrosis, Viking stock experienced a dip following a phase 2 trial update. While phase 2 data suggest the potential for pivotal-stage trials, competition from GLP-1 medications and FDA approval of Madrigal Pharmaceuticals' Rezdiffra have dimmed VK2809's commercial prospects.
Analysts are still upbeat about Viking Therapeutics stock, with a unanimous “Strong Buy” rating from the 10 analysts in coverage.
The average analyst price target of $114.33 indicates a potential upside of 104% from current price levels. The Street-high price target of $26.15 suggests that the stock could rally as much as 146%.
GPCR vs. VKTX: Which Stock Is the Winner?
Both Structure and Viking Therapeutics are poised to thrive in the expanding weight-loss market with their innovative drugs. While analysts show optimism for both, Viking holds more upside potential, according to Wall Street’s consensus forecasts. However, that’s likely due in part to Viking stock’s sharp pullback in recent months, while Structure has rallied.
With analysts predicting that Structure’s easier-to-manufacture oral GLP-1 offering could be the first such product to hit the market that’s not offered by giants Novo and Lilly, these factors tilt the scales in favor of Structure Therapeutics as it continues to make strides in its weight-loss drug development.
On the date of publication, Sristi Suman Jayaswal 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.
