New York: A little-known biotech firm posted promising results Friday for a weight-loss pill it is developing, sending its shares soaring more than 30 per cent.
Structure Therapeutics, which went public in February, said an early-stage trial showed its once-a-day pill helped 24 overweight or obese participants lose about 5 per cent of their body weight over a month. None of the patients dropped out because of bad reactions, the company said, saying the results showed "an encouraging safety and tolerability profile."
The ensuing frenzy among financial traders demonstrates how weight-loss fever is raging on Wall Street, with investors betting big on companies even when the ultimate viability of their products is far from assured. The commercial success of drugs like Ozempic, Wegovy and Mounjaro have revealed a demand so hot that some analysts project it could become the biggest drug category in the entire industry, where even a small slice of the pie could translate to enormous profits.
Structure, based in San Francisco, is developing a pill that could prove to be a popular alternative to today's most popular drugs for losing weight, which all are injected once a week. The company's shares soared by as much as 66 per cent in early trading Friday, and finished the day up 35 per cent, giving it a stock-market value of $1.8 billion.
Umer Raffat, an analyst at Evercore ISI, said Structure's data would be competitive with weight-loss pills being developed by Eli Lilly and Pfizer. Liver safety had been a concern for investors, he noted, and the company's release said there were "no clinically meaningful changes in liver function tests."
Eli Lilly, which makes Mounjaro, and Novo Nordisk, the manufacturer of Ozempic and Wegovy, have dominated the market for the new class of medicine often called GLP-1 drugs, named for the gut hormone they mimic. The drugs, which help control blood sugar for diabetic patients, also suppress appetite by slowing the stomach from emptying and sending a signal of fullness to the brain. A host of companies are working on competitors, with 54 anti-obesity drugs in clinical trials or showing positive results in late-stage studies, according to Goldman Sachs analysts.
Structure has no products that have been approved by the US Food and Drug Administration, and it doesn't generate any revenue. Still, investor enthusiasm about the weight-loss pill it is developing has roughly doubled its shares since it began trading in February.
The company said Friday it had agreed to sell shares to certain institutional investors that would raise $300 million, cash it will use to help develop its leading drug candidate and fund additional studies.
