An Irvine-based clinical-stage, biopharmaceutical company led by a former top Allergan executive is planning to go public via a special purpose acquisition company, a blank-check vehicle commonly known as a SPAC, where it will have access to $276 million in a trust.
Aeon Biopharma Inc. said late last month it will merge with Priveterra Acquisition Corp. to accelerate the clinical development of its lead product, ABP-450, which is an injection to treat debilitating medical conditions in neurology, such as migraine headaches.
The transaction, expected to be completed in the first half this year, will value the combined company at a post-money equity value around $475.5 million, according to the company, which will have the ticker AEON on Nasdaq.
Aeon had considered going public in an IPO in 2021 but decided not to because of the current atmosphere on Wall Street.
“IPOs just aren’t getting done,” Chief Executive Marc Forth told the Business Journal.
“We found the perfect partner in Priveterra. They’re familiar with our story and know our science. We were able to structure a deal so that it provides value to all our existing and new investors. The structure makes a lot of sense and is tied to clinical milestones.”
Forth, who worked 16 years with Allergan, including as a senior vice president of neurosciences, urology and medical dermatology, is one of several former top Allergan executive to become involved in OC neurotoxin startups. Others include former CEO and chairman Brent Saunders, who sits on the board of the parent company of Newport Beach’s Hugel America Inc., which is looking to make its mark as a new botulinum toxin brand, and David Moatazedi, who was head of Allergan’s Aesthetics division until 2018, when he jumped to Newport Beach’s Evolus Inc. (Nasdaq: EOLS), a seller of a Botox-like wrinkle remover with a $437 million market cap as of last week.
Alphaeon Ties
Priveterra completed its IPO of 27.6 million public shares in February 2021, at the usual SPAC price of $10 per unit, raising proceeds of $276 million. On Jan. 10, the company announced that at least $20 million in additional funding has been committed by existing Aeon investors. Investors to date had provided approximately $132 million.
The chairman and CEO at Priveterra is Bob Palmisano, who has more than 40 years of experience in medical devices, including as the former CEO of Wright Medical Group when it was sold to Stryker Corp. for $4.1 billion in 2020.
“We believe Aeon brings a disruptive business model with its exclusive therapeutic focus into a market dominated by one player with 95% of the U.S. market,” Palmisano, who will become chairman of the newly traded company, said in a statement.
$3B TAM
Allergan, once headquartered in Irvine, was purchased by Abbvie Inc. in 2020; its top local executive is Carrie Strom, who is a senior vice president, AbbVie, and president, Global Allergan Aesthetics.
The neurotoxin market is split between therapeutic uses, with about 58% of sales, and aesthetic with about 42%. The global therapeutic neurotoxin market is currently estimated to be $3 billion, of which the U.S. represents approximately 84%, and projected to grow to approximately $4.4 billion in 2027, Aeon said.
Allergan’s Botox currently holds approximately 95% U.S. market share for therapeutic indications in the neurotoxin space. Competitors have had a difficult time competing against Allegan because the latter can put on its label that its product is for migraine prevention, Forth said.
“Our ability to secure migraine prevention, if successful, will allow us to compete directly,” Forth said.
Aeon plans to use a botulinum toxin—most often known as the complex behind Botox and other wrinkle-smoothing aesthetic products, but which also is used to treat numerous medical conditions—to commercialize therapeutic treatments for patients with disorders related to the nervous system.
Aeon is focusing on two areas: migraines, which affects about 1 billion people worldwide, making it the third most prevalent illness in the world; and cervical dystonia, where the neck and shoulders have painful twisting movements.
The company last September announced positive topline data from a Phase 2 study of its ABP-450 for cervical dystonia. In December, it completed enrollment for a Phase 2 trial for the preventive treatment of episodic migraines.
The company will be spending the money on its trials that are scheduled to be completed within three years. It currently plans to double to about 20 employees by the end of the year and will ramp significantly once its ABP-450 passes its clinical trials during the next two years and it prepares for commercialization, Forth said.
“We’re making great progress across our late-stage clinical programs as we continue the development of ABP-450 for the treatment of multiple debilitating medical conditions,” Forth said.
