Structure Therapeutics shares plummeted more than 30% after clinical data for its investigational obesity drug failed to meet expectations.
The company's pill GSBR-1290 is part of a class of weight loss drugs known as glucagon-like peptide 1 (GLP-1) agonists, like Novo Nordisk (NYSE:NVO)'s Wgovy and Ozempic and Eli Lilly and Co (NYSE:LLY)'s Mounjaro and Zepbound.
In a Phase 2a study that involved patients with obesity and with type 2 diabetes mellitus (T2D), GSBR-1290 showed that the obesity patients experienced a statistically significant decrease in weight after eight weeks, a 4.74% drop when compared to placebo.
In the T2D cohort, patients experienced a 3.3% to 3.5% reduction in weight after 12 weeks.
However, investors were disappointed by these results as Structure’s drug did not perform as well as expected nor as well as its rivals, specifically Eli Lilly's obesity pill in development orfoglipron.
Analysts at Jefferies wrote in a note to clients that the trial results showed the drug was “nicely on track to be orfor-like.”
“T2D is a work-in-progress, placebo-adjusted weight loss of 3.3% to 3.5% was below the 5% aimed for in the Phase 2a. Efficacy falls in the middle of the pack for oral GLP-1s.”
They have a ‘Buy’ rating on the stock and US$79 price target.
Structure CEO Dr. Raymond Stevens said GSBR-1290 in T2D patients met its aim of demonstrating favorable safety, tolerability and efficacy results.
“Our data demonstrated that once-daily GSBR-1290 has the potential to be a best-in-class compound and a backbone for future combinations that could address large cardiometabolic indications,” Dr. Stevens said in a statement.
Structure said full 12-week obesity data from the trial is expected to be released in the second quarter of 2024, to be followed by the initiation of a Phase 2b study in the second half of next year.
Shares of Structure had tumbled 33.6% at US$39.30 on Monday afternoon.