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Investment Overview – The GLP-1 Revolution – Structure Therapeutics Enters The Fray
Glucagon-like peptide-1, or “GLP-1”, agonist drugs have taken the pharmaceutical world – and recently, the wider world – by storm. This is due to their ability to suppress patient’s appetites and help them lose weight, with apparently minimal side effects, to a degree that was not previously thought possible.
The most famous examples of GLP-1 agonist drugs are Novo Nordisk’s (NVO) semaglutide – approved to treat Type 2 Diabetes (“T2D”) under the brand name Ozempic, and Obesity under the brand name Wegovy, and Eli Lilly’s (LLY) tirzepatide – approved for the same two indications under the brand names Mounjaro and Zepbound.
These two are expected to dominate a market forecast to be worth over $100bn before the end of this decade, supplanting the PD-1 inhibitor class of drugs – led by Pharma giant Merck’s (MRK) cancer therapy Keytruda, with +$25bn sales in 2023 – as the biggest selling drug class, and will likely become the biggest selling drug class in history.
In that context, it’s not surprising that numerous biotech and pharma companies are attempting to bring their own GLP-1 drugs to market. One strong late stage clinical study data readout for a GLP-1 agonist could turn a $1bn market cap biotech into a $10bn market cap biotech overnight. Commercial success could turn a $10bn valuation into a $100bn valuation. Witness the share price performance of Lilly and Novo over the past five years – the former’s has risen by over 750%, and the latter’s by over 400%.
Given the rewards on offer, the number of credible GLP-1 agonist drug candidates in studies is arguably lower than you might expect. The Pharma giants Amgen (AMGN), Roche (OTCQX:RHHBY), and Pfizer (PFE) all have GLP-1 drugs in clinical studies – although results have been mixed to date, and no pivotal, registration enabling studies have begun.
Boehringer Ingelheim and partner Zealand Pharma have a candidate, Survodutide, in late-stage studies, and Viking Therapeutics’ (VKTX) candidate VK2375 has impressed in a Phase 2a study, and Altimmune’s (ALT) pemvidutide has demonstrated weight loss qualities, while also minimizing loss of lean muscle mass.
Meanwhile, in February 2023, a South San Francisco-based company named Structure Therapeutics (NASDAQ:GPCR) – the subject of this article – completed its Initial Public Offering (“IPO”) of ~12.35m American Depositary Shares (“ADS”) priced at $15 per share, raising a total of ~$185m.
Structure’s GLP-1 Candidate
Structure says in its Q2 2024 10Q submission:
Our initial focus is on G-protein coupled receptors (“GPCRs”) as a therapeutic target class. GPCRs regulate numerous diverse physiological and pathological processes, and approximately one in every three marketed medicines targets GPCR-associated pathways.
By leveraging our world-class GPCR know-how, we aim to design differentiated small molecule therapies to overcome the limitations of biologics and peptide therapies targeting this family of receptors.
The GLP-1 receptor is a class B G protein-couple receptor, and is the target for Structure’s lead clinical stage asset, GSBR-1290, which is an “oral small molecule product candidate”.
It’s important to note that both semaglutide and tirzepatide are self-injectable therapies, therefore, if successful, Structure’s oral candidate will be competitively differentiated from these therapies – many patients are likely to prefer an oral therapy to an injectable.
After completing Phase 1 single ascending dose (“SAD”) and multiple ascending dose (“MAD”) studies, and reported in September 2023 that in the latter study, GSBR-1290:
… was generally well-tolerated with no adverse event-related discontinuations and demonstrated an encouraging safety profile and significant weight loss of up to 4.9% placebo-adjusted, supporting once-daily dosing.
By October 2023, Structure’s share price had reached a high of ~$70 per share, offering up a +350% gain for any investors who had acquired it during or immediately following the company’s IPO. Much of these gains were erased in December 2023, however, when the company provided first detailed data from its Phase 2a studies in Type 2 Diabetes Mellitus (“T2DM”) and obesity, plus additional results from Japanese bridging study and findings from 6- and 9-month toxicology studies.
Digging Into December Data
The Phase 2a study was a randomized, double-blind, 12-week placebo-controlled study that had enrolled a total of 94 participants at the time of the December data release, including 60 participants randomized to GSBR-1290. The primary endpoint was safety and tolerability, with secondary endpoints including reduction in weight, and reduction in HbA1c for the T2DM cohort.
Safety-wise, the drug performed adequately, with no study drug related serious adverse events, and the majority of adverse events reported were mild or moderate in nature, although 96% of patients across both arms did report a treatment related adverse event (“TRAE”) of some kind.
One patient discontinued the study due to an adverse event, and another experienced elevated liver enzymes, and was subsequently diagnosed with fatty liver disease.
Efficacy wise, in the T2DM cohort there was a “a statistically significant and clinically meaningful reduction in weight at Week 12” of -3.26%, or -3.51% placebo adjusted, while in the obesity cohort, after eight weeks, patients achieved -5.55% weight loss, or -4.74% placebo adjusted.
After such a short period, it may be too early the weight loss capabilities of GSBR-1290, suffice it to say, the results were statistically significant – although it may be noted that Viking Therapeutics’ VK2735 achieved 14.7% weight loss at 13 weeks at the highest dose (35 patients dosed).
The market sell-off, which saw Structure’s stock fall from ~$60 per share to $35 per share almost overnight, was apparently more related to the T2DM cohort HbA1c reduction data, which fell slightly short of expectations.
Analysts noted that a pipeline drug being developed by Eli Lilly named orforglipron – the company has several pipeline GLP-1 drugs which have demonstrated compelling results in mid-stage studies – was able to reduce HbA1c levels by about 1.25% to 1.75%, and weight by 5% to 6% after 12 weeks in a Phase 2 study, and separately, HbA1c reduction of 1.37% and weight reduction of up to 7.1% versus placebo in a Phase 1b.
By comparison, the -1.01% reduction in the 45mg arm, and -1.02% reduction in the 90mg arm achieved by GSBR-1290 fall slightly short of the bar set by orforglipron, also an orally available drug.
On a more positive note, however, the dropout rates in the 12-week Phase 1b study of orforglipron reached 36%, suggesting GSBR-1290 may be the more tolerable drug. Safety issues have dogged other oral GLP-1 candidates, with Pfizer halting the development of its twice daily oral candidate danuglipron, for example, due to a +50% discontinuation rate.
June 2024 GSBR-1290 Updates Stir Share Price Amid Decent Efficacy, Strong Safety
After the December Phase 2a results, Structure’s share price treaded water for several months, until the company released some updated 12-week data from its Phase 2a obesity study, triggering a surge in its stock price. According to the company:
At Week 12, 67% of GSBR-1290 treated participants achieved ≥6% weight loss and 33% achieved ≥ 10% weight loss, compared to 0% for placebo.
The presentation of the data may be a little awkward – most companies present a mean weight reduction across the entire patient population, which begs the question of why Structure did not do the same – but also puts GSBR-1290 in the same ballpark as Viking’s VK-2735, if not quite at the same level. Additionally, Structure also revealed a new tablet formulation of GSBR-1290 achieved mean weight loss of up to 6.9% at 12-weeks.
From a safety perspective, the news was once again positive – according to a press release:
AE-related study discontinuations ranged from 5% in the Phase 2a obesity study to 11% in the capsule to tablet PK study. There were zero cases of drug-induced liver injury or persistent liver enzyme elevations reported across the two studies.
Structure also announced plans to initiate a Phase 2b obesity study in the fourth quarter of this year – the company says:
The 36-week global study is expected to use the tablet formulation of GSBR-1290 and include approximately 300 participants to be treated with multiple doses and dose titration regimens.
Analysis – Something, Or Nothing? Structure’s Progress Has Been Superior To Most, But Standard-of-Care Status May Prove Elusive
According to NBC News, at this year’s American Diabetes Association conference in Orlando, Florida, researchers were expected to present data on no fewer than 27 GLP-1 drugs in development.
That speaks to the competitiveness of the field, although as mentioned earlier, with the reward of a +$100bn market opportunity in play, it is arguably surprising there are not more candidates in development.
The reality is that GLP-1 drugs are not easy to develop. Research into the drug class began decades ago, and it took scientists many years to identify its weight loss qualities, and to understand how to effectively deliver the drug – being peptides, they are unusually large molecules that degrade rapidly once inside the body.
As such, Structure has achieved a great deal simply by developing a candidate, and the performance of that candidate in early and mid-stage studies has lots of positives, from the statistically significant weight loss, to the strong safety profile – especially for an oral drug.
Announcing Q2 earnings earlier this month, Structure reported a cash position of $927m, and a net loss for the quarter of just $26m, so there is apparently no danger of the company’s funding runway being exhausted before pivotal studies are completed, and regulatory submissions made (providing the data makes a case for commercial use).
On the negative side, management made no mention of any further T2DM studies, so it could be the case that it has admitted defeat on that front, despite some initial signs of efficacy.
Nevertheless, for a company with a current market cap valuation of $2.2bn, success in obesity would provide more than enough share price impetus to create some extremely enviable gains for shareholders.
Arguably the biggest challenge facing Structure is the pace at which companies are bringing next-generation GLP-1 agonists through. There are, in fact, many different types of GLP-1 agonist drugs.
Sometimes referred to as “incretin mimetics”, as they interfere with this appetite controlling hormone’s receptors, making us feel less full, even tirzepatide and semaglutide do not share the same mechanism of action (“MoA”), with tirzepatide targeting glucose-dependent insulinotropic polypeptide (GIP) as well as GLP-1, while semaglutide is solely focused on GLP.
Amgen’s MariTide also targets GLP and GIP – these types of drugs are often termed “twincretin”, while another Lilly candidate – which has achieved 17.5% mean weight loss at 24 weeks in studies – is nicknamed “Triple-G”, as it targets GLP-1, GIP, and glucagon. Meanwhile, Novo Nordisk is advancing a candidate known as amycretin, which targets GLP-1 and amylin receptor agonist, and has achieved 13% weight loss at 12 weeks in studies.
Every drug developer will put forward different reasons why their candidate will ultimately merit “best-in-class” status, but with decades of experience in this field, it is not hard to see why Lilly and Novo are preeminent in the field, having secured the only commercial approvals so far, and it is easy to see these two companies continuing to dominate the space with their next-generation candidates churning out mightily impressive data. Lilly’s market cap valuation of nearly $1 trillion is testament to that.
Nevertheless, on the oral front, arguably, Structure’s safety profile for GSBR-1290 is making the case for best-in-class, and safety is of paramount concern to the weight loss industry. Roche’s CT-996 candidate may be the closest challenger Structure has on the oral pill front, but there would surely be room for two approved oral pills in this massive market.
Meanwhile, Structure itself is advancing more candidates – according to its Q2 earnings release:
The Company is developing amylin receptor agonists for potential use either alone or in combination with GLP-1R agonists to treat obesity and associated diseases and expects to select a development candidate in the fourth quarter of 2024.
Two further obesity programs excite – a GIPR selective agonist and GLP‑1R/GIPR combination, with a candidate due to be selected in 2025, and “a Phase 2 ready biased APJR agonist for potential selective or muscle-sparing weight loss, that may also be used to treat idiopathic pulmonary fibrosis (“IPF”), while a fifth candidate, LTSE-2578, an “oral small molecule antagonist that targets the lysophosphatidic acid 1 receptor (“LPA1R”)”, is in Phase 1 studies for IPF already.
In general, I would say the market is somewhat skeptical of Structure at the present time, but having reviewed the company and its candidates and shared my thoughts above, I find myself relatively impressed by progress to date, and the pool of candidates is an effective hedge against the failure of GSBR-1290, while the cash position ensures no dilutive fundraising for investors.
The reality is that not even scientists who have been studying the field for years know quite what will succeed and what won’t, which makes it extremely difficult for the retail investor to favor one candidate over another – it was a similar story with the discovery and roll-out of Keytruda – nobody could have claimed they saw this drug being the +$25bn per annum “mega-blockbuster” it is today, even one decade ago.
If drug development, and GLP-1 drug development is something of a lottery, the knowledge and expertise required to “buy a ticket” remains beyond all but a handful of companies. Structure has been able to “buy” several tickets, and with the strength of its cash position, and its enviable safety profile, I am prepared to stick my neck out and suggest its stock makes for a decent “buy and hold” prospect, with plenty of catalysts in play to keep short-term investors intrigued also.
