BioAge values ​​IPO at $198 million, confirming focus on obesity drug research

BioAge Labs said on Wednesday that it raised $198 million in an IPO, capitalizing on strong investor interest in drugs that can promote weight loss.

BioAge is currently testing a drug that is designed to boost the effects of popular obesity drugs called GLP-1 agonists. The company sold 11 million shares at $18 each as part of the offering. That figure beats projections the company made last week and came shortly after the company had already increased its offering by 40 percent.

The offer confirms BioAge's strategic focus on one of the hottest areas of pharmaceutical research. The Richmond, California-based company was founded nearly a decade ago and, as its name suggests, began working on treating age-related diseases.

To achieve this goal, the company licensed an experimental drug from Amgen called azelaprag in 2021 and wanted to test it as a means of preserving muscle mass in older people. Results from a Phase 1 trial a year later showed the drug had the potential to do this in people 65 and older and on strict bed rest. At the time, the company was discussing plans to begin a mid-stage trial in people in intensive care.

Since then, however, BioAge has positioned azelaprag as an anti-obesity drug. The company has focused on the drug's potential to solve a common problem with weight-loss drugs such as Novo Nordisk's Wegovy and Eli Lilly's Zepbound, which can help people lose weight quickly but lose muscle mass in the process.

Last October, BioAge announced plans to launch a Phase 2 trial testing azelaprag along with Zepbound, with the goal of showing that the combination leads to more weight loss and improves people's body composition than Zepbound alone. Four months later, a group of prominent investors poured $170 million into the company in a type of “crossover” financing round that would lay the groundwork for an IPO. The round was one of the 10 largest crossover financings for a biotech company in the first quarter of 2024, according to a report by investment firm William Blair. Now the company has made its way to Wall Street, and at a time when young pharmaceutical companies are generally difficult to go public.

“BioAge Labs' IPO represents more than just a financial milestone; it is a testament to the company's adaptability and the rapidly evolving landscape of metabolic health and longevity research,” said Kazi Helal, senior healthcare analyst at PitchBook, in an analyst note in early September. “As the first of potentially many companies of its kind to go public, BioAge's performance will be closely watched by investors, industry players and healthcare professionals alike.”

Still, BioAge has competition. Regeneron Pharmaceuticals, Biohaven Pharmaceutical and the recently formed SixPeaks Bio are among those developing muscle-preserving anti-obesity drugs. Many other companies, including Lilly and Novo, are also developing various types of weight-loss drugs, some of which are in advanced stages of clinical trials.

BioAge expects to present results from its combination study with Zepbound next year. A second study testing azelaprag with Wegovy is also expected to begin in 2025, according to the filing.

BioAge's IPO will take place on Sept. 5, the highest in a single month since February, according to data from BioPharma Dive. So far, 20 biotech companies have priced IPOs in 2024, roughly matching the pace of the past two years. Most of them, like BioAge, have programs in clinical trials and have raised hundreds of millions of dollars in venture capital.

Prior to its offering, BioAge had secured $321 million in private funding.