This overlooked obesity-drug stock has 80% upside, JPMorgan says

JPMorgan said it expects Structure Therapeutics' oral GLP-1 weight loss drug candidate to generate peak sales of more than $1 billion by 2035.

• Structure Therapeutics is an overlooked stock that could surge on the GLP-1 weight loss craze.
• JPMorgan initiated the company at "Overweight" with a $65 price target, representing 80% potential upside.
• "Meaningful upside from even a small piece of unprecedentedly large GLP-1 market," JPMorgan said.

The burgeoning GLP-1 weight loss market is expected to be worth $100 billion by 2030, leaving plenty of room for more companies to enter the space and take market share from Novo Nordisk and Eli Lilly.

According to JPMorgan, Structure Therapeutics is a name investors should pay attention to. 

The bank initiated coverage of the near-$2 billion biotech company with an "Overweight" rating and $65 price target, representing potential upside of 80% from current levels.

The bank said it sees "meaningful" upside for Structure Therapeutics from even a small piece the booming market for GLPP-1 drugs. 

Structure Therapeutics is developing the drug candidate dubbed "1290," which is a "pure-play option" for the GLP-1 weight loss market, according to JPMorgan.

The drug is an oral pill rather than an injectable and is based off of a small molecule formulation that has a slight time-to-market advantage, only behind Eli Lilly's oral weight loss drug candidate orforglipron by three years, but potentially one to two years ahead of other competitors, the bank said. 

Eli Lilly's oral GLP-1 drug candidate is expected to hit the market in 2026, while Structures' could hit the market by 2029. 

JPMorgan said early results suggest the drug candidate offers "on par" weight loss results for patients with "no major concerns on safety." That's in contrast to other oral weight-loss drug candidates, like Pfizer's, which was discontinued last year due to its high rates of adverse side effects on patients. 

"We think GPCR's market share in the oral market can approach 5% over time in an unprecedentedly large market. All-in, we think 1290/Structure could be an attractive partnership opportunity for larger biopharma companies looking to participate in the T2D/Obesity market," JPMorgan said.

The bank said it expects Structure Therapeutics' oral GLP-1 weight loss drug candidate to generate peak sales of more than $1 billion by 2035. 

Structure Therapeutics trades on the Nasdaq exchange under the ticker symbol "GPCR" and went public in February 2023.