Structure Therapeutics: Can Its Oral GLP-1 Capture a Third of the $82B Obesity Market?

The investment case for Structure Therapeutics is built on a massive, expanding market and a promising new drug candidate. The global anti-obesity drug market is projected to grow at an compound annual growth rate (CAGR) of 18%, ballooning from $25.87 billion in 2025 to $82.55 billion by 2032. This secular tailwind is the bedrock for any high-growth play. Structure's aleniglipron, an oral small-molecule GLP-1 agonist, aims to capture a slice of this pie. Its Phase 2b data shows a clear path: a clinically meaningful and statistically significant placebo-adjusted mean weight loss of 11.3% at the 120 mg dose over 36 weeks. That efficacy, coupled with the oral route-a segment expected to hold a third of the market-positions aleniglipron as a potential high-growth entrant.

Yet the path to scaling this growth is fraught with a specific, existential threat. CEO Raymond Stevens has explicitly identified the rise of compounded copycat drugs as his "biggest fear". This isn't a theoretical risk. As shortages of branded injectables like Wegovy and Zepbound created a void, patients turned to cheaper, unapproved compounded versions. Even after official shortages eased, this market persists, with estimates suggesting as many as 1.5 million US patients may be using them. For a new entrant like Structure, this creates a dangerous dynamic. If aleniglipron gains traction, copycats could flood the market, undercutting its pricing power and eroding its market share before it even launches. The company's belief that its small-molecule chemistry is harder to replicate than peptide-based injectables is a key defensive thesis, but it is a battle it must win in the court of regulation and public trust, not just clinical data.

The bottom line is a classic growth-versus-friction setup. Structure has a product with compelling efficacy in a market that is set to triple in size. The scalability of that growth, however, hinges on its ability to control a potent headwind that has already destabilized the market it seeks to enter.

The Compounding Threat: A Scalability and Pricing Risk

The compounded drug problem is not a minor footnote; it is a direct assault on the commercial model for any new obesity drug. The scale is staggering. As many as 1.5 million US patients may be using compounded weight-loss drugs, a figure that represents a significant portion of the current market. This isn't a niche, illegal activity-it's a widespread, patient-driven response to supply constraints and high prices. For Structure Therapeutics, this creates an immediate and substantial headwind to market penetration. Its target patient base is already being served, albeit illegally and unsafely, by cheaper alternatives.

The regulatory response has been inadequate. Drugmakers consistently argue that the US Food and Drug Administration hasn't done enough to stop copycat versions from proliferating. While the FDA has taken steps like publishing a list of compliant overseas suppliers of active ingredients, this has not stemmed the flow of compounded drugs. The agency's actions are seen as insufficient to curb a market that has persisted even after official shortages of branded injectables ended. This regulatory gap is the core vulnerability. It allows a cheaper, unapproved product to undercut the commercial value of new branded drugs, including Structure's aleniglipron.

The real-world impact is already evident. This problem has delayed the commercialization of other oral GLP-1s, a warning sign for Structure. It suggests that even with promising clinical data, a new entrant can face a prolonged battle for market share against a cheaper, unregulated alternative. For Structure, this threat is twofold. First, it pressures the company to lower its prices to compete, directly squeezing its revenue model. Second, it forces a costly investment in enforcement and brand protection, diverting capital from R&D or commercial launch activities. The company's belief that its small-molecule chemistry is harder to replicate is a defensive advantage, but it is a battle it must fight in the courts of law and public perception, not just on the clinical trial grounds. In a market where oral drugs could capture a third or more of the total, this threat to pricing power and market share is a critical risk to the growth thesis.

Strategic Moves and Financial Positioning

Structure Therapeutics is taking deliberate steps to fortify its financial position and diversify its pipeline, aiming to navigate the compounding threat and fund its path to market. The most significant recent move is a $100 million patent licensing deal with Roche. This strategic agreement, signed in late December and disclosed in early January, provides a substantial cash infusion that bolsters the company's balance sheet. More importantly, it reduces a key future risk. By securing a license for patents related to Roche's oral GLP-1 asset CT-996, Structure is likely mitigating potential litigation over its own intellectual property. This deal supports the company's claim of having a broadest and strongest global IP portfolio for small-molecule GLP-1s, a critical defensive asset against copycats.

Diversification is the second pillar of this strategy. The company is advancing a second oral drug, ACCG-2671, an oral small molecule amylin receptor agonist, into Phase 1 clinical trials. This move is crucial for reducing reliance on aleniglipron alone. Amylin-based therapies are seen as a next-generation component of obesity treatment, and having a differentiated pipeline asset provides a longer-term growth runway and potential for combination therapies. It also gives Structure more leverage in future partnerships or licensing deals.

The near-term focus, however, remains aleniglipron. The company is preparing for a Phase 3 clinical development program in mid-2026. This milestone is critical. It will require significant funding to execute, and the company's financial runway will be tested. The Roche deal provides a buffer, but the ultimate success of the growth thesis hinges on the Phase 3 program delivering the efficacy and safety data needed to secure regulatory approval and commercialize the drug before the compounded market fully consolidates.

The bottom line is a company actively building its defenses. The $100 million cash injection and pipeline diversification provide a credible, if not yet proven, path to fund the next phase. The upcoming Phase 3 launch in mid-2026 is the make-or-break event that will determine whether these strategic moves translate into a scalable, high-growth business or if the compounding headwinds prove too formidable.

Catalysts, Risks, and What to Watch

The investment case for Structure Therapeutics now hinges on a clear sequence of near-term events. The primary catalyst is the positive Phase 3 data for aleniglipron, expected in 2027. This will be the definitive validation of the drug's efficacy and safety at a larger scale, directly driving stock appreciation and providing the market validation needed for a successful commercial launch. Until then, the company's progress will be measured by the execution of its ongoing Phase 1 study for ACCG-2671 and the preparation for that pivotal Phase 3 program.

The primary risk, however, is a regulatory failure that could undermine the entire commercial model. The continued inaction of the FDA on compounded drugs is the existential threat. If the agency does not take stronger enforcement actions, the market for aleniglipron will face immediate saturation from cheaper, unapproved alternatives. This would force Structure to compete on price from day one, eroding its gross margins and the total addressable market it aims to capture. The company's belief that its small-molecule chemistry is harder to copycat is a defensive advantage, but it is a battle it must win in the courts of law and public trust, not just on the clinical trial grounds.

A key watchpoint is the FDA's enforcement posture, specifically its actions against the channels that enable the compounded market. The agency's recent initiative to send warning letters to telehealth providers and companies for misleading GLP-1 advertisements is a positive signal. It shows the FDA is targeting the marketing and distribution networks that fuel demand for copycat drugs. Investors should monitor whether these actions translate into concrete enforcement against compounding pharmacies and whether the agency takes a more aggressive stance on the importation of raw materials. A shift toward stricter enforcement would be a major de-risking event for Structure, while a continuation of the status quo would confirm the persistent threat to its growth thesis.