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Shares of BioAge Labs (BIOA+0.20%), a biopharmaceutical company focused on obesity drugs, opened 25% above its initial public offering (IPO) price on Thursday.
The Richmond, California-based company set the price for its IPO at $18 a share Wednesday evening. The company aimed to raise nearly $200 million by offering 11 million shares at this price in an upsized IPO, according to a press release.
BioAge initially said that it planned to only offer 7.5 million shares between $17 to $19 each.
The company’s stock initially surged 24% to over $22 per share Thursday. It is trading on the Nasdaq Global Select Market under the ticker symbol “BIOA.”
The IPO comes amid a surge of investor interest in a new class of weight loss medications known as GLP-1s. These drugs, which mimic a hormone that regulates appetite and blood sugar, have shown remarkable effectiveness in treating obesity and type 2 diabetes.
Market leaders Novo Nordisk (NVO+0.77%) and Eli Lilly (LLY+2.39%), the pharmaceutical giants behind popular GLP-1 drugs Wegovy and Zepbound, have seen their stock prices soar as a result. Over the past 12 months, Novo Nordisk’s stock has climbed 39%, while Eli Lilly’s has surged 68%.
These gains reflect investors’ bullish outlook on the future of the obesity drug market. Morgan Stanley (MS+3.30%) analysts anticipate the global market for GLP-1 drugs will reach $105 billion by 2030.
BioAge is now trying to get in on the action. In an SEC filing, the company said it is targeting obesity and diabetes drugs due to their “high prevalence and resulting potential for impact on population health” and “outsized commercial opportunities.”
BioAge’s leading drug candidate is azelaprag, a pill that mimics apelin, a peptide released during exercise that decreases with age.
Early clinical trial results suggest that taking azelaprag along with an injectable weight loss drug results in increased weight loss and prevents muscle mass loss, a side-effect of current weight loss drugs.
BioAge started a phase 2 clinical trial this year of azelaprag in combination with tirzepatide, the active ingredient in Eli Lilly’s Zepbound. The company plans to start a second phase 2 trial of the drug next year to see how it works with semaglutide, the drug behind Novo Nordisk’s Wegovy and Ozempic.
BioAge’s IPO comes just months after it raised $170 million in financing this past February.