3 Reasons to Buy BioAge Labs Hand Over Fist Stock in October

BioAge Laboratories (BIO 4.94%) is a biotech company that you may be hearing a lot about in the coming years. Dedicated to the development of drugs for closely related problems such as metabolic disorders and aging, BioAge has candidates that, so far, are not directly comparable to anything on the market.

This makes it a business worth watching. And for three reasons, it is also worth buying the fist, despite its relatively high level of risk. Here’s what makes it such a compelling choice now.

1. It just raised a lot of capital from all the right investors

With BioAge hot on the heels of its Sept. 25 initial public offering (IPO), it doesn’t want its cash right now. Its IPO raised $198 million in gross proceeds, and its Series D funding round, which closed in February, raised $170 million. It will be a while before it needs to raise additional capital, as its research and development (R&D) spending was just $10.4 million in the second quarter.

In the latest round of pre-IPO fundraising, highly influential venture capital (VC) groups such as Andreessen Horowitz (a16z) and RA Capital invested, as did the venture arms of biopharma titans such as Eli Lilly and Amgen. That could pave the way for future drug development collaborations with those pharmaceutical companies, but for now the bottom line is that the biotech has the backing of prestigious powerhouses.

It is likely to have a strong network that will help it recruit high-quality managerial and scientific talent, among other benefits. And for a pre-revenue biotech business, that’s a major asset.

2. It has a strategy to grab a share of today’s and tomorrow’s massive markets

The hottest pharmaceutical market today is that of obesity drugs. One figure being thrown around for the size of that market is $100 billion in annual revenue by 2030, but some estimates call for even greater heights in roughly the same time frame. BioAge’s lead candidate, a molecule called azelaprag, could theoretically have an addressable market size consistent with those higher estimates. Here’s why.

In a pair of phase 2 clinical trials, the biotech is investigating whether an oral formulation of azelaprag is useful for treating obesity when used as an adjunct to Novo Nordiskthe drug semaglutide (Wegovy) and whether it is useful as an adjunct to the Eli Lilly drug tirzepatide (Zepbound). A third early-stage study will look at whether the candidate can help with insulin sensitivity; if this is successful, it would pave the way for it to be tested to treat diabetes, perhaps alongside Novo Nordisk’s Ozempic or Lilly’s Mounjaro.

So at the outset, if these three studies yield positive data, azelaprag could have an addressable market as large as the top two drugs on the market right now. And it would not be in competition with them because it would be an adjuvant, improving their effectiveness.

If azelaprag can increase the strength of its companion drugs enough for patients to take lower doses of them, it could also lead to a combination therapy that causes fewer side effects; which could give it an advantage over newer drugs that appear by the time of launch. Preliminary evidence derived from animal models suggests that this potential is very much alive, although high-quality clinical data from human patients are needed before definitive conclusions can be drawn.

The possibility of having that degree of future-proofing for its top candidate is therefore another reason to buy the stock.

3. Its top contender could have an outrageously long growth spurt

BioAge also aspires to create therapies capable of extending human life spans as well as health spans. Such ambitions may sound like science fiction, but they are much closer to being within reach than they might seem.

Although they do not make explicit claims, the company’s materials suggest that azelaprag may be able to promote longevity as well as healthy aging. It may do so by triggering an increase in the activation of a cellular receptor called APJ, which is associated with a wide range of benefits for human metabolism and skeletal muscle maintenance, among other benefits.

But what’s more interesting is what BioAge is willing to say outright: that its candidate azelaprag “has the potential to recapitulate the effects of exercise.” That’s right, this biotech thinks it could develop a drug that could be one of the holy grails of biopharma — something that delivers many of the benefits of exercise with minimal side effects, in pill form.

At this time, BioAge does not even have a disclosed program investigating azelaprag for this specific purpose. It is likely to come within the next two years, assuming there are no major clinical hiccups and clinical trial data continue to look favorable. There is no guarantee that it will succeed in commercializing such a therapy.

However, buying the stock today means near-future exposure to the potentially unprecedented course of research and development on an exercise replacement therapy. Undoubtedly, the risks of an investment are significant, as with all biotech stocks before earnings, but for investors with a high risk tolerance, the potential upside makes it worth considering buying shares today.