Demand for weight-loss drugs has grown at an astonishing rate in recent years, driving share prices of healthcare giants such as Eli Lilly (LLY) and Novo Nordisk (NVO) higher. For instance, sales of Novo Nordisk’s weight-loss drug have soared to almost $28 billion in the last 12 months. The drug was initially approved in 2017, and is also used to treat diabetes. Similarly, Eli Lilly’s weight-loss drug was approved in 2022, and now rakes in more than $17 billion in annualized sales.
The demand for weight-loss treatments should gain momentum in the upcoming decade, given the strong early results shown by Eli Lilly and Novo Nordisk in this segment. Considering these factors, here’s another weight-loss stock you can consider buying at current valuations.
An Overview of Structure Therapeutics
Valued at $2.4 billion by market cap, Structure Therapeutics (GPCR) is a clinical-stage biopharmaceutical company that develops and delivers novel oral therapeutics to treat a range of chronic diseases with unmet medical needs. Its lead product candidate is GSBR-1290, an oral-based GLP-1R agonist that will be used to treat type-2 diabetes and obesity. It also develops oral small-molecule therapeutics targeting other GPCRs for treating pulmonary and cardiovascular diseases.
Morgan Stanley is Bullish on Structure Therapeutics
Last week, Morgan Stanley (MS) initiated coverage of Structure Therapeutics with an “overweight” rating. According to the investment firm, Structure Therapeutics should gain traction in the diabetes and obesity market if and when its oral drug candidate, GSBR-1290, is approved.
The brokerage firm wrote that Structure’s GSBR-1290 has a competitive profile and should launch in the U.S. by 2028, with the potential to surpass $6.3 billion in global sales by 2040.
Morgan Stanley expects Phase 2b data for the obesity drug by the end of next year. In its bullish note, MS said, “In our view, oral GLP-1s, such as GSBR-1290, are likely required to achieve statin-like penetration levels in obesity and drive market growth to over $100B.”
The firm set a price target of $118 for the stock - an ambitious 172.5% premium to the current trading price, and a new Street-high for GPCR.
Is GPCR Stock Trading at a Discount?
As Structure Therapeutics is still pre-revenue, it isn't possible to value the company in terms of sales or earnings.
However, the initial trial data for the GSBR-1290 is quite encouraging. For instance, Novo Nordisk’s Wegovy helped individuals lose 12.4% of their weight after 16 months of weekly treatment. Comparatively, GSBR-1290 helped patients lose 6.2% of their weight in 12 weeks, according to data from its phase 2a study.
In addition to weight loss, Structure Therapeutics has formulated GSBR-1290 as a daily oral tablet rather than an injection, allowing patients to more easily take their medicine from home and avoid visiting a clinic.
Each of the 10 analysts tracking GPCR stock has a "strong buy” rating on the biopharma company.
The average 12-month price target for GPCR stock is $87.40, indicating an expected upside potential of over 101% from current levels.
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.
