In one of the biotechnology sector’s first initial public offerings this year, Structure Therapeutics said Thursday it raised $161 million in an upsized IPO.
Headquartered in South San Francisco, California, Structure sold 10.74 million American depositary shares for $15 each. It’s the largest biotech IPO in months, according to data from BioPharma Dive. The company’s shares started trading Friday on the Nasdaq stock exchange under the ticker symbol GPCR.
Shares surged 73% in the company's first day of trading, the best debut for a U.S. company since 2021, according to IPO research firm Renaissance Capital.
The ticker is a nod to the object of Structure’s research. The company is focused on G protein-coupled receptors, or GPCRs, which sit on the surface of the cell and relay signals across its membrane. They’re involved in a wide array of cell functions and, as such, have long drawn the interest of drugmakers.
By one 2018 estimate, some 35% of all drugs then approved by the Food and Drug Administration targeted GPCRs in some way. Several startups, Structure among them, have recently formed with plans to go after GPCRs as well.
Structure is already in early-stage clinical trials with two drug candidates, one for obesity and Type 2 diabetes and another for pulmonary arterial hypertension and idiopathic pulmonary fibrosis. A third candidate, also for idiopathic pulmonary fibrosis, is in preclinical stages.
Its lead program is likely to draw attention as it’s aimed at what’s known as the glucagon-like-peptide 1 receptor, which is also the target of several marketed drugs from Novo Nordisk and Eli Lilly. GLP-1 is currently at the center of a research gold rush as Lilly, Amgen, Pfizer and others are trying to target it in new ways.
Lilly’s effort is led by Mounjaro, which hones in on the GLP-1 receptor and another peptide called GIP. It’s approved in the U.S. for Type 2 diabetes, but has shown great promise in testing as a weight loss treatment. If successful in an ongoing obesity trial, one SVB Securities analyst projected that Mounjaro could eventually earn annual sales as high as $26 billion by 2030.
Structure aims to go after the GLP-1 receptor in a different fashion, using oral small molecules instead of injectable drugs like Novo’s approved products and Lilly’s Mounjaro. The company’s work is aided by computational drug discovery specialist Schrodinger, which is a partner to a variety of different biotechs and co-founded Structure.
Formerly known as ShouTi, the company most recently raised private financing in 2021, when it pulled in a $100 million Series B round led by BVF Partners. It raised a Series B extension in 2022, bringing in another $33 million to advance its clinical trials.
A number of heavyweight investors are also involved in the company’s funding, including F-Prime Capital Partners, Lilly Asia Ventures and Sequoia Capital's China arm.
Last year, Structure announced the launch of Basecamp Bio, a wholly owned subsidiary focused on identifying new drug discovery targets and headed by a former Amgen executive.
Its IPO, and the shares’ performance in the days and weeks to come, could be an early bellwether for the biotech sector this year.
After a difficult 2022, multiple industry watchers predict companies will need drug candidates in clinical testing, or soon on the horizon, in order to pull off an IPO. Having solid data is critical to convincing the firms that hold the purse strings that a startup is worth backing, investors said at this year’s J.P. Morgan Healthcare Conference.
So far this year, two other biotech companies — Cadrenal Therapeutics and Genelux — have priced small public offerings, raising a few million dollars each. Another, Mineralys Therapeutics, has set terms for its IPO that could be of similar size to Structure’s.
At $161 million, Structure’s offering is higher than almost every biotech IPO that has priced in the past six months. The only two companies to raise more via IPO are Third Harmonic Bio, which brought in $185 million in September, and Prime Medicine, which got $175 million in October.
Editor’s note: This story has been updated to include first-day trading results.