Structure Therapeutics Inc. (GPCR) Earnings Call Transcript & Summary

Thank you. I got in last night, yes. Okay. All right. And then flying home tomorrow bright and early. I wanted to get out tonight. Oops, are we live? All right, yep. Got to be careful what I say. Yep. All right. You've got to be careful what I say. Go into it.

So, thanks for joining us. I'm Terence Flynn, Morgan Stanley's U.S. Biopharma Analyst. For important disclosures, please see Morgan Stanley's Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Very pleased to be hosting Structure Therapeutics this afternoon, or this morning, I guess. We're still in the morning. The company's CEO, Raymond Stevens. Raymond, thanks so much for joining us. Really appreciate the time today.

Thank you, Terence.

So again, I think we'll focus a lot on some of the recent pipeline developments. Obviously, you guys had some data out for both aleniglipron and your oral amylin. So maybe first, just to start on aleniglipron, obviously, the obesity market is growing rapidly here. We're seeing the first two orals enter the market and seeing market expansion. As you think about the profile of aleniglipron that you guys have generated so far, what are kind of the key features we should think about on differentiation? I think one of the big key differences is the ability to do things.

Differentiators is our dynamic range. So we can go from 2.5 milligrams to 180 milligrams. What this really translates into is potentially best-in-class efficacy. So the data that we showed last week was up to 16% weight loss. So we're starting to see a separation of the pack where many of the, you know, competing molecules are in that 11% to 12% range, and we're out at 16%. And that 16% is after only 7 to 8 weeks median on the top dose. So I'm excited about the Phase 3 when we've been out to 52 weeks. You know, hopefully, we'll see even more efficacy. But I think dose range and potentially best-in-class efficacy is really what separates aleniglipron from everybody else right now.

Great. You know, I kind of alluded this to in my opening remarks, but, you know, as we look at the launches of the existing orals, what have been your kind of impressions of what we've seen so far just from a high-level takeaway side?

So it was about a year ago I was on stage with you, you know, at this same conference. And a year ago the conversation was, is there room for oral GLP-1s? People were still debating this a year ago. Fast forward only a few months, it was January, J.P. Morgan, you know, conference, all Wegovy came out. And then in April, we had Foundayo come out. Now, it's only been 7, 8 months of data that we have. Orals have already taken 17% of the market, and it's still ramping up. I think the number is 80% are new entrants into the market. That means that it's all about expansion. So what we're seeing is with the orals coming on, there was a big pent-up demand. We're seeing really good launches. Big question we get is, you know, with Foundayo, has the launch been slower? My attitude is give it time. I think it's just, you know, let's keep in mind this has only been a few months. So they've been fantastic launches. The estimate is market analysis by 2030, 50% of the market is going to be oral GLP-1s.

Great, and maybe talk to us about scalability. I know that's something else that you guys have highlighted. So as we think about not just the U.S. opportunity, but also as a global opportunity and why scalability is so important.

Yes, and this is somewhat of a sort of reminder to the previous question, in this space, in GLP-1s class of medicines, one of the other things that's really starting to be appreciated is the ex-U.S. market is just as big as the U.S. market. We're really seeing that this is unique from, I think, a lot of other medicines. Now, to aleniglipron, we design this molecule at the very beginning. You know, we thought about, you know, manufacturing, cost of goods. We thought very carefully about that. Our tagline for the company is making medicines accessible to all. So when we designed the molecule, obviously efficacy, safety, tolerability was top of mind. But what was also on our mind was manufacturing. You know, could we make the manufacturing as streamlined and as simple as possible so we could truly get the cost of goods down as low as possible so we could address a very large global unmet need? And I'm really proud of the, you know, our CMC team. They've done a phenomenal job at really making these medicines at the right, at the right point.

Great. Maybe we'll pivot to some of the recent data that came out. So you had the 72-week ACCESS open-label extension data. Maybe just give us kind of the highlights from both an efficacy perspective, durability, but also safety tolerability, as, again, particularly at the 2.5 mg data.

Yes, so I'll start with, with the, you know, the purpose. We've done more Phase 2 studies than I think anybody else has done in characterizing, particularly for an oral GLP-1. Blai Coll, M.D., Ph.D., our Chief Medical Officer, again, has just done a phenomenal job there. We're really, really happy with the 2.5 milligram dose. Starting at that dose, we saw a 2.6% discontinuation rate due to AEs. This is the lowest discontinuation rate that we've seen with any of the GLP-1s. So, first of all, in terms of that aspect, you know, the job. The 2.5 milligrams start, we also wanted to see what the physicians are telling us is that what they want is gradual weight loss. They don't want to see that sort of rapid weight loss. So could we have a sort of linear profile, a linear shape for the weight loss, that's important. And we're able to see that. We see weight loss in the first 4 to 6 weeks. That's really important. Otherwise they think it's not working, they'll give up. So we think that's an important component, but that linear shape of the line is really important. And then, so that's the 2.5 milligram start and the start low, go slow. Really, really works well. And then the question is in that data, 72 weeks of data, safety, when I'm what I'm really pleased with is, if we look at these sort of liver tox, you know, ALT, AST, we did not see any issues at all. So we've been in over 800 participants, 72 weeks, this is a very safe drug. So that's really, really important, the safety profile itself. And then in terms of efficacy, again, after only 7 to 8 weeks at the top dose, 180 milligrams, we're seeing 16% weight loss. That's significantly above all the competition out there. And I think it's only going to get better from there. So we're really pleased with the aleniglipron data that we shared last week. And talking to the KOLs, what they've highlighted is, again, we're separating from the pack and we're able to maintain that solid weight loss.

Yes, so next quarter is actually going to be. Great. I think there's a couple more readouts coming up here in the fourth quarter. So you have a body composition study, you also have a SWITCH study, and so maybe just remind us kind of what we're hoping to learn from those two studies in the fourth quarter.

Three studies. The body composition we'll read out. This is where we're looking at fat versus muscle. This is an important question. This is now required by the FDA in this class of medicines. And part of it is really making sure that we do these studies optimally. We're also starting at 2.5 milligrams and we'll go to 180 milligrams. That study as well, 44 weeks. The second study that I'll read out is type 2 diabetes. Are individuals with type 2 diabetes who are overweight. And here, in our previous type 2 diabetes, we only went to 90 milligrams. Now we'll be going up to 180 milligrams. So we think that's an important readout also. That will help us to inform the ACCOMPLISH-2 study, Phase 3 study, that's now underway. And then the third study, the SWITCH study, we know that those on injectable GLP-1s, the discontinuation rate is 85% after 2 years. Most people stop taking injectable GLP-1s after 2 years. And so one of the big words in the recent FDA update was, and the final update was maintenance, long-term maintenance for this class. What the FDA wants to avoid is what is often referred to as the yo-yo effect. People lose weight, gain weight, lose weight, gain weight. And so we wanted to ask the question, could you switch from an injectable GLP-1 over to an oral? Do you have to re-titrate? Or can you start at dose X on an injectable? And can you seamlessly go straight to a similar dose of an oral? That's the question that we're asking in that SWITCH study. So all three of those we'll read out next quarter.

Great, maybe just a couple follow-ups on the SWITCH study. I know Eli Lilly had some data for Foundayo. Maintain any key differences in terms of design for your trial versus their trials. We try, everyone's going to do these cross-trial comparisons, but anything we need to be mindful.

Of there. Yes, and I think Eli Lilly did, you know, for Eli Lilly, I think that was a very well-executed study. Orforglipron can achieve 11% to 12% weight loss. They compared it to tirzepatide, a GIP, and that's putting the bar pretty high. And so what we're doing is, we're looking at, you know, with GLP-1s, we think that, first of all, aleniglipron is showing currently 16% weight loss. So we have potentially best in class in terms of efficacy, GLP-1. Can we maintain that weight loss or can we possibly, you know, get, you know, additional weight loss as well if you're on a GLP-1 or, you know, can you maintain to a GIP. So I think it's really the biggest difference is we have potentially better in class molecule. Can you maintain that?

And so just because you aren't doing the tirzepatide? The appetite transition, you're only doing GLP. Okay, and what, just remind us the size, like how many people are going to be in this?

Yes, we haven't updated. What we've stated is that we're doing GLP injectables. It may be a combination. I don't have the exact number off the top of my head.

Okay, but it's fairly, it's like a decent sized trial.

Yes.

Okay, okay, great. And then on the type 2 diabetes side, again, you mentioned, you know, you previously went up to 90. Now you're going up to 180.

Okay.

I'm assuming you're going to gather not only weight loss data, but hemoglobin A1C data. So maybe just remind us what you guys saw before at the 90 mg dose.

Okay. Yes, so at the 90 mg dose, we saw, I think it was around 3.5% weight loss, and so for those individuals living with type 2 diabetes, they typically see less weight loss than and those without, that are not living with type 2 diabetes. So it was also at a lower dose. So we want to sort of basically test at a higher dose, can we see further improvements in hemoglobin A1C? And that's really the main driver is hemoglobin A1C, you know, for individuals living with type 2 diabetes. We've recently seen some very encouraging data on Foundayo, in type 2 diabetes, and so we think this is an important question to ask.

Okay. Okay, great. Maybe now you alluded to this, but you guys have already moved into the Phase 3 program. So maybe just high-level level set us kind of the scope of that Phase 3 program that's started and then how to think about additional.

Additional trials and other indications? So we have two different studies going on, ACCOMPLISH-1 and ACCOMPLISH-2. This data will read out at the end of 2028. There are individuals that are on maintenance dose for 52 weeks, this is the FDA guidelines. Approximately 5,000 participants total. There will be three different cohorts going up to 45, 90, and 180 milligrams. The starting dose will be 2.5 milligrams. Again, what we've learned from all the studies is individuals are very happy at that 2.5 milligram start and start low and go slow titration steps once every 4 weeks. Again, we know that is the right sort of titration step both for tolerability, but also that linear weight loss that we're trying to achieve. So, those are the rough parameters of the, and then one other thing I'd say is, you know, I think, again, our Dr. Coll has done a phenomenal job at doing additional studies to help us do the best optimal sort of Phase 3. So one of the experiments that he did in Phase 2 was what we called an open-label extension. One of the challenges in the field are placebo groups in this space. And so, Dr. Coll wanted to ask the question, if you do an open-label extension where you can extend for, you know, basically in the Phase 3 for an additional year. Does this help with the clinical trial execution? It certainly helped in the Phase 2 study. We believe it will help us in the Phase 3 study. The use of heat maps, again, Dr. Coll's been very creative. He was the first to use an open-label extension in obesity. First to use these heat maps, where we look at the patient journey. What happens if you skip a dose? That has also really helped us understand how to do the titrations, how to do the steps, and how to have the best possible patient experience as they go through titration phase all the way through maintenance. So all those things combined give us the confidence that the Phase 3 will be very well executed.

Great. Anything else on baseline characteristics about this population you're enrolling versus maybe the Phase 2 trial?

It will be very similar Phase 2 to Phase 3. Okay, great. And then how do you think about, you know, the rate of discontinuations due to AEs that would be competitive? I mean, maybe just frame for us that, and then, again, you mentioned the 2.6% I think you guys saw in the latest cut of the data. Right level to think about here from the Phase 3 program? Yes, that was a smaller study in a shorter period of time. So I have to sort of factor that in. We need to be competitive. At the end of the day, we got to be competitive in all the different categories in terms of efficacy, tolerability, and we do think discontinuation rate. At the end of the day, what really matters? Individuals are taking the medicine and it's working. That they don't discontinue. So that 2.6% rate I think was, you know, we're really proud again, I think best in class in the field. But that was a smaller study. I'm not going to give a specific number, but we need to be competitive with everybody else.

OK, great. And then the second part of my question was just on the other comorbidities you might consider. You know, we've seen Eli Lilly, Novo Nordisk lean into some of these other indications like sleep apnea, for example.

Okay. For this particular, the way that we analyze the field, the foundation is chronic weight management. This is the biggest market opportunity. It's also the market that's becoming, you know, direct pay in terms of growth. And so we are laser focused on chronic weight management as the primary foundation. We're also doing individuals who are overweight with type 2 diabetes because we think that that's also a really important as well. That's where we're focused for the Phase 3. That's ACCOMPLISH-1 is individuals who are overweight, ACCOMPLISH-2 is individuals overweight with type 2 diabetes.

Okay, great. Any latest thoughts on potential partnership for aleniglipron? Like where are we at? Any timelines?

We continue having dialogues. We enjoy interacting with everybody in the industry. Laser focus on execution as the strategics still understand this space. This is uncharted territory. It's consumer product together with the pharmaceutical market. It's a field that's growing really, really fast. What we think with our aleniglipron data being best in class, it's highly differentiated. The dose range, 2.5 to 180 is differentiated, all the different properties. And so we think that this is going to be a really great molecule. We're focused on execution. Strategics will continue having dialogues, but we think it's significantly de-risked with this latest data.

Okay. Okay, great. Maybe we'll move on to your second program, ACCG-2671. This is the oral amylin. Again, an update about a week ago from the SAD portion of the Phase 1. So maybe just talk to us about the highlights for those that didn't see that data, and then we'll dig into some more.