BIOAGE Labs Inc (NASDAQ: BIOA) plummeted Monday after revealing that it was bailing on an obesity treatment study with its “azelaprag” drug on Friday. The biotech operator went public only two months ago with a US$198-million-dollar IPO and has now hit a sizeable bump in the road.
The company’s lead drug candidate was being investigated in a Phase II trial as a combination therapy with the Zepbound (tirzepatide) therapeutic developed by Eli Lilly and Co (NYSE: LLY).
Unwanted levels of liver enzymes known as transaminases detected in participants were the reason for the study’s discontinuation. This undesirable activity was not observed in those who took Zepbound only. When levels of these enzymes become too elevated in the body they can cause organ damage.
“We made the difficult decision to discontinue the STRIDES phase 2 study of azelaprag because it became clear that the emerging safety profile of the current doses tested is not consistent with our goal of a best-in-class oral obesity therapy,” BioAge chief executive, Kristen Fortney, stated in a press release.
The study’s first patient was dosed at the end of July and it was set to enroll 220 people, but only 204 signed up before the trial was scrapped. Out of the group that signed up, 11 were found to have unfavourable elevated levels of the enzymes.
The intended aim of the combo therapy regimen was to eliminate fat while retaining lean muscle. It demonstrated significant efficacy in rodent and Phase I studies, but it appears BioAge will now be focusing on its neuroinflammation treatment drug NLRP3 and going back to the drawing board.
The newly listed biotechnology outfit plans to submit an IND application next year for this CNS therapeutic and aims to start a Phase I study in 2026. It is the only other drug in BioAge’s pipeline.
🪵🪓BioAge $BIOA just got taken to the woodshed. This is a rough one. There's nothing hotter in biotech than obesity treatment right now, with Munjal at Lilly or Ozempic at Novo Nordisk leading the charge. But BioAge's product hit a snag with liver issues, halting trials. Stock… pic.twitter.com/ZlKtoOfiwd
— Market Rebellion (@MarketRebels) December 9, 2024
Read more: Breath Diagnostics onboards new president and closes critical financing
Read more: Breath Diagnostics pioneers novel lung cancer breath test
Financial firms lose all optimism
As azelaprag was BioAge’s lead drug candidate, the discontinuation made investors and financial institutions wary about the company’s future.
Citigroup Inc (NYSE: C) dropped its stock target by US$38 after the news broke. The bank now has it set at merely US$7.
New York’s Jefferies Group now has the same share target for BioAge, having previously set it at US$42 before the clinical trial failure.
Many analysts have a very bullish outlook for the obesity treatment market — another factor contributing to the drug developer’s rapid decline on the Nasdaq.
Morgan Stanley (NYSE: MS), for instance, expects this industry to be worth over five times what is now by 2030 at approximately US$77 billion. Moreover, Grand View Research anticipates a compound annual growth rate of 33 per cent for the remainder of the decade, resulting in a valuation of US$77.25 billion by the end of the 2020s.
rowan@mugglehead.com
