Aeon Biopharma Inc. is entering the next phase of development under a new chief executive following major setbacks for its lead drug candidate.
The Irvine-based clinical-stage biopharmaceutical company, which is developing a medicine similar to Botox for therapeutic purposes, plans to hold an FDA Type 2a meeting on Jan. 21 to review its development plan and initial data. It was previously scheduled for Nov. 19.
Aeon on Nov. 20 announced the first closing of a $6 million Private Investment in Public Equity financing, also known as PIPE, resulting in an initial $1.79 million for the company. It also entered into agreements with Daewoong Pharmaceutical Co. to exchange $15 million of convertible notes for 23 million shares of Aeon’s common stock.
Proceeds from both transactions will help accelerate biosimilar development by up to six months, reduce outstanding debt by more than 90% and extend cash runway into the second quarter of 2026, according to the company.
“Securing the funds from the first closing of the PIPE allows us to maintain full program momentum,” CEO and President Rob Bancroft said in a statement.
Shares in Aeon increased 1.2% to 83 cents following the announcement. Its valuation has dropped more than 99% from $2 billion in 2023 to a $9.3 million market cap (NYSE: AEON).
It’s suffered several setbacks in the past two years, including an interim analysis released in June 2024 that its Phase 2 trial to treat migraines on ABP-450 didn’t meet its primary endpoint.
Company Halts Migraine Research
Bancroft was appointed CEO in April, replacing Marc Forth, a former Allergan exec, who had been in the role since before the company was spun off in 2020 from Newport Beach-based Alphaeon Corp.
Aeon said that Forth was departing to “pursue another opportunity” and is expected to remain at the company as a member of the board of directors.
After Aeon went public via a special purpose acquisition company, also known as a SPAC, in 2023, shares traded around $10 before falling to around $3.37 a month later. In February, the company completed a 1-for-72 reverse stock split to comply with NYSE listing requirements.
Aeon had been developing its proprietary botulinum toxin complex for the prevention of chronic migraines, which affect about 1 billion people worldwide.
It licenses ABP-450 from Daewoong Pharmaceutical, a South Korean-based pharmaceutical manufacturer that has invested tens of millions of dollars in the company. Aeon uses the same toxin as Newport Beach-based Evolus Inc., whose flagship neurotoxin product, Jeuveau, competes with Botox in the aesthetics industry.
The company had to shift gears after its flagship migraine trial failed to meet the primary endpoint, resulting in shares plunging 53% to $1.60 per share and the implementation of a cost-reduction plan, including cuts to more than half of its workforce. Before the cuts, Aeon reportedly had around 10 employees.
Clinical Updates
Last month, Aeon reported what it said was positive data for ABP-450.
Analysis showed that the treatment demonstrated “identical amino-acid sequencing and highly similar functional characteristics” to market-leading neurotoxin Botox, according to Aeon.
“These results are supported by a globally approved and fully scaled manufacturing platform with approvals in 69 countries,” Bancroft said.
“Together, these scientific and global data points validate our biosimilar strategy and instill confidence in Aeon’s path forward.”
Aeon is seeking regulatory approval in the U.S. through a Biologics License Application (BLA) submission. It estimates the global therapeutic botulinum toxin market at $3.3 billion.
Aeon lists additional applications for ABP-450, including cervical dystonia, where the neck and shoulders have painful twisting movements, as well as gastroparesis and posttraumatic stress disorder.
The company reported having cash and cash equivalents of $5.9 million as of Sept. 30.
