This Healthcare Company Believes Its GLP-1 Pill Could Be "Next in Line" After Novo Nordisk and Eli Lilly. Its Valuation Is a Fraction of Theirs.

Novo Nordisk and Eli Lilly are the 2 starring companies successful the GLP-1 cause contention close now. But the tract is inevitably going to get bigger arsenic much drugmakers are researching obesity drugs successful the hopes of securing immoderate important marketplace share, successful what's becoming the adjacent large maturation accidental successful healthcare.

The bully quality is that immoderate smaller stocks whitethorn person much imaginable upside if they get support for their products. There is, of course, the hazard that they don't get there. But 1 institution that believes it could soon person an approved GLP-1 pill is Structure Therapeutics (NASDAQ: GPCR).

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This twelvemonth could beryllium a cardinal 1 for Structure, arsenic the company's GLP-1 value nonaccomplishment pill, aleniglipron, enters signifier 3 trials. If the results beryllium to beryllium strong, past it whitethorn lone beryllium a substance of clip earlier the cause obtains support from regulators and starts generating important gross for the company. In its astir caller trial, radical taking aleniglipron achieved a placebo-adjusted value nonaccomplishment of up to 15.3% (on average) erstwhile connected the highest dosage, aft 36 weeks. That puts it successful enactment with different apical value nonaccomplishment treatments successful the marketplace today.

Management points retired that different GLP-1 drugmakers typically tally longer trials that span 60-plus weeks. For Structure to execute comparable value nonaccomplishment astatine a overmuch earlier signifier is promising. And with nary liver injuries oregon important broadside effects, the attraction besides appears to beryllium safe.

Structure's CEO, Ray Stevens, believes the company's oral pill is "next successful line," aft Eli Lilly and Novo Nordisk, to get support from regulators. Novo Nordisk has already obtained approval, portion Eli Lilly hopes to get the greenish airy perchance by adjacent quarter. However, Structure inactive needs to station beardown signifier 3 proceedings results earlier it tin get to the support stage, which suggests that it mightiness not get support for immoderate time.

Meanwhile, the healthcare banal has already tripled successful conscionable the past 12 months, which whitethorn suggest that investors person priced successful support for the cause astatine this stage. Considering its marketplace capitalization of $6.5 billion, investors are paying a important premium for a institution that isn't generating immoderate gross close now.

There whitethorn inactive beryllium much upside up for the stock, but with an elevated valuation, investors should beryllium cautious with Structure, due to the fact that if determination are immoderate bumps successful the road, it could beryllium owed for a steep sell-off.