Citi was the first on Wall Street to believe in the startup BioAge. It is creating a cure for obesity

Citigroup has upgraded to "buy" shares of small-cap obesity drug developer BioAge Labs, calling the company’s lead molecule promising, with the first-in-human study recently announced. The upgrade sent the stock up more than 14%. Citigroup believes it could rise a further 70%.

Citi analyst Samantha Semenkow upgraded BioAge Labs from "neutral" to "buy" and doubled her 12-month target price to $10 per share yesterday, October 22, CNBC reported.

Shares of the company, which has a market capitalization just under $217 million, jumped more than 14% yesterday to $6 apiece. In early trading today, the stock had extended the gains by another 20% as of this writing. Even after the rally, the new Citigroup target price implies 67% upside versus the October 22 close.

BioAge is likely to see upside from its novel obesity treatment, BGE-102, a highly potent small-molecule NLRP3 inhibitor, meaning an agent that blocks the NLRP3 protein that drives inflammatory responses in the body, according to Semenkow. “Given guidance for multiple [obesity product] and third-party data readouts over the next ~12-15 months, we believe it’s appropriate to upgrade BIOA,” she wrote.

On August 15, BioAge announced that the first participant had been dosed in a phase I clinical trial evaluating BGE-102. The company is developing the molecule for obesity, either as a standalone therapy or in combination with GLP-1 drugs – a market 95% controlled by semaglutide (the active ingredient in Wegovy from Novo Nordisk) and tirzepatide (the active ingredient in Zepbound from Eli Lilly).

“In our assessment, BGE-102 look[s] promising as a potentially differentiated NLRP3 inhibitor that could serve as a combo option with oral GLP1s and/or as a monotherapy,” Semenkow wrote to clients. 

Beyond obesity, the drug could potentially address cardiovascular and neurodegenerative conditions, since NLRP3 is viewed as a key driver of age-related inflammation, the biotech firm said in the August press release.

Semenkow mentioned competitors as "potential stock moving catalysts" for BioAge – in particular, Viking Therapeutics, Structure Therapeutics, and Altimmune are working on obesity drugs, as well.

Citigroup is the only bank currently recommending a "buy" on BioAge shares, according to MarketWatch. Others are split between "holds" and "sells." The average target price of $4.67 per share is below the current market price.

The AI translation of this story was reviewed by a human editor.