JPMorgan said Structure Therapeutics is an overlooked player in the GLP-1 market that may one day have a competitive product and compete with the likes of Eli Lilly and Company. Analyst Hardik Parikh initiated coverage of the clinical-stage drug developer with an Overweight rating and $65 price target, implying 82% potential upside. This year, the stock is down 12%. “We believe the oral GLP-1 opportunity is undervalued and believe the market could reach $30 billion in sales by 2035,” Parikh wrote in a note on Tuesday. “GPCR’s leading asset, 1290, is the opportunity Even a small share of the pure-play option would support significant upside for the stock.” Parikh said Structure’s current market cap of $1.7 billion underestimates the opportunity to create peak sales of more than $1 billion between 1290 and 2035. He said that rival oral peptides are more difficult to manufacture and have a slight advantage in time to market. He predicts that by 2029, 1290 could become the first non-Eli Lilly and non-Novo Nordisk oral GLP-1 on the market, and said it appears to be a competitive oral GLP-1 profile with its main competitor Eli Lilly The company’s oral non-peptide GLP-conforming products. The weight loss efficacy seems to be comparable in obesity and we don’t see why this wouldn’t continue in a longer trial, it’s a step or two behind in T2D but over time as the dose is increased, Still competitive,” Parikh said, adding that no major concerns about safety arose in clinical trials with higher doses. The higher than normal rate of gastrointestinal events in phase 2 trials appears to be manageable and resolvable. “Overall, 1290 should have competitive efficacy/safety, and it should also have fewer manufacturing hurdles than at least some other competitors entering the market in 2030 and beyond.” Additionally, Parikh believes Structure is This could be an attractive partnership opportunity for large pharmaceutical companies looking to get involved in the obesity and type 2 diabetes treatment markets.
