Structure Therapeutics’ Shares Plunge on Disappointing Obesity Pill Data

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Shares of the obesity-focused biotech company Structure Therapeutics took a hit on Monday following the release of new data on their experimental obesity pill, GSBR-1290. This news came as a disappointment to investors, especially in comparison to the promising data from Eli Lilly’s experimental obesity pill.

GSBR-1290 is one of the leading candidates in the race to develop highly effective weight-loss pills for what is expected to be a massive market. Companies like Structure, Lilly, and Novo Nordisk are at the forefront of the obesity-care revolution, driven by Lilly’s injectable weight-loss medicine Zepbound and Novo’s injectable Wegovy.

Investors had previously shown great enthusiasm for Structure’s potential. Since the American depositary receipts (ADRs) began trading in early February, Structure’s ADRs had surged by an impressive 127% as of the close of trading on Friday.

However, the newly announced data have caused a significant drop in Structure’s ADRs, plunging by 49% in midmorning trading on Monday.

According to the company, GSBR-1290 was well-tolerated by patients and led to significant reductions in weight and blood-sugar levels. Structure’s founder and CEO, Raymond Stevens, stated that these results demonstrated the potential for GSBR-1290 to become a top-notch compound and a foundation for future combinations that could address major cardiometabolic conditions. The company also highlighted that the new data proved the concept of GSBR-1290 in both obese patients and those with Type 2 diabetes.

While the safety results were strong, the efficacy results fell short of market expectations.

A Comparison of Efficacy Results: Structure Drug vs. Lilly’s Orfoglipron

In a Phase 2a study of the Structure drug, Type 2 diabetic patients in the high-dose groups experienced promising results. After 12 weeks, they saw a 1.02% reduction in their HbA1c levels, a measure of blood sugar, when compared to the placebo. Additionally, they had a 3.3% reduction in weight, also adjusted for the placebo effect.

However, when comparing these efficacy results to Lilly’s trial of its experimental obesity pill, orfoglipron, the outcomes appear less favorable. According to Leerink Partners analyst David Risinger, diabetic patients in a Phase 2 trial of Lilly’s orfoglipron observed a reduction in HbA1c levels ranging from 1.25% to 1.75% after 12 weeks. Moreover, they experienced a weight loss of 5% to 6%.

Nevertheless, the Structure trial produced interesting findings for obese patients who were not diabetic as well. After eight weeks, they witnessed a 4.7% reduction in weight when compared to the placebo. Remarkably, these results closely resembled those seen in non-diabetic obese patients who participated in a Phase 2 trial of Lilly’s orfoglipron. In that trial, participants achieved a 5% to 6% reduction in body weight after eight weeks.

Addressing the overall findings of both trials, Risinger expressed reasonable satisfaction. Although the efficacy of the Structure drug on Type 2 diabetes patients fell below expectations, he highlighted the clean safety and efficacy results observed in obesity patients.

Despite such optimism from Risinger, the market’s reaction was less enthusiastic. The anti-obesity market has proven unpredictable, characterized by significant fluctuations. Additionally, there has been speculation regarding whether Pfizer may acquire a company developing an anti-obesity pill, given the challenges it has faced with its own weight-loss drug, danuglipron. However, the recent data from the Structure trial may diminish any potential interest from Pfizer in acquiring the company.

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