Most of 2025 has been disappointing for BioAge Labs (BIOA 4.40%) shareholders, but things are looking up. During the week that ended Oct. 25, shares of the obesity drug developer soared by 46.6%.
On Oct. 22, Samantha Semenkow, a sell-side analyst at Citigroup, upgraded her bank's rating on BioAge Labs from neutral to buy. Semenkow also raised her price target to $10 per share.
Citi's new price target for BioAge Labs implies a gain of about 32% from the stock's closing price on Oct. 24. Unfortunately, those gains are a long way from guaranteed. Let's gauge this stock's ability to continue outperforming by looking at what drove it higher, and at the road ahead for its experimental weight management drugs.
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Why did BioAge Labs' stock jump?
The drugs Wegovy from Novo Nordisk and Zepbound from Eli Lilly both limit appetite by targeting GLP-1 receptors in the pancreas. Global sales of GLP-1 drugs are expected to reach $95 billion annually by 2030, according to Goldman Sachs.
But BioAge is taking a unique approach to weight management with BGE-102. The experimental small-molecule drug enters the brain, where it inhibits NLRP3, a protein implicated in a broad range of diseases. On Oct. 22, Ventyx Biosciences announced positive results from a trial with a different experimental NLRP3 inhibitor. VTX3232 didn't reduce patients' weight, but it did improve some cardiovascular risk factors.
Semenkow cited the company's lead candidate, BGE-102, as a reason for the upgrade. NLRP3-driven inflammation in the brain can lead to several health issues, including energy intake dysregulation.
In August, the company began dosing patients in a phase 1 trial. If weight reductions observed in preclinical testing carry over to clinical trial results, this stock will surge. Obese animals treated with BGE-102 reduced their weight by up to 15%, and adding Wegovy to the mix increased the weight loss to about 25%.
NASDAQ: BIOA
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Why BioAge Labs' stock is super risky
It's going to be a long time before we know whether BGE-102 safely reduces weight for humans. In August, the company said it expected to report top-line data from a single ascending dose (SAD) portion of its phase 1 trial with BGE-102 by the end of the year. Unfortunately, a single dose won't tell us much about long-term safety or efficacy.
The second part of its phase 1 trial will include daily doses over a two-week period, but two weeks probably isn't enough time to record significant weight reductions. The company doesn't expect to present data from a phase 2 proof-of-concept trial until late 2026.
BioAge Labs shares soared during the week of Oct. 24, but it still has a very low market cap of just $272 million. This means raising capital by selling new shares, either at recent prices or below, would make it nearly impossible for long-term shareholders to realize a positive return.
BioAge finished June with $313 million in cash after burning through $21.6 million in the second quarter. It estimates its existing cash is sufficient to fund operations through 2029. This estimate seems overly optimistic for a company that achieved an annualized cash burn rate of more than $86 million before it began dosing clinical trial participants.
If BGE-102 produces excellent clinical trial results next year, the stock could soar severalfold. Since it's a pre-commercial company without any products to sell, disappointing results could also lead to heavy losses that investors can't recover from. We know so little about BGE-102 that the risk outweighs the potential reward by miles. It's probably best to watch this stock's story play out from a safe distance.
