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Irvine-based Aeon Biopharma Raises $20 Million

Aeon Biopharma Inc. closed a $20 million underwritten public offering on Jan. 7.

The Irvine-based clinical-stage biopharmaceutical company agreed to sell 40 million units at a price of 50 cents per unit. Each unit included one share of common stock at 63 cents per share and two warrants, a Series A warrant and Series B warrant, at an exercise price of 63 cents.

The company said it plans to use the proceeds for general corporate purposes and working capital, as well as continue the development of its ABP-450 treatment as a biosimilar to Botox for therapeutic uses.

“We believe the capital raised in this offering is sufficient to fund operations through 2025 and will facilitate the execution of the comparative analytical studies needed under the 351(k) regulatory pathway,” Chief Executive Marc Forth said in a statement.

Shares in Aeon (NYSE: AEON) plummeted 62% to 21 cents following the announcement of the pricing.

The company’s stock has fallen 99% to 13 cents and a $10.3 million market cap since hitting an all-time high of $17.17 in March 2024.

Underwritten by Aegis Capital

New York City-based investment bank Aegis Capital Corp. acted as the sole book-running manager for the offering.

Aeon granted Aegis a 45-day option to purchase additional shares of common stock and/or warrants up to 15% of the number of shares and warrants sold in the offering.

Aegis ended up exercising its over-allotment option for 6 million additional Series A and Series B warrants.

The company’s “recurring losses from operations and the net capital deficiency and negative cash flows from operations raise substantial doubt about the entity’s ability to continue as a going concern,” according to an audit report by accounting firm KPMG LLP mentioned in the prospectus.

Company Cost Reduction Plan

Aeon last May implemented a cost reduction plan that halted the company’s previous migraine research and cut its workforce by more than half.

“Following a strategic review of our resources, we made the decision to implement several cost reductions that will preserve cash while still supporting corporate activities,” Forth said.

The company’s dramatic fall began its Phase 2 trial failed.

The company decided to discontinue the study of ABP-450 as a treatment for chronic migraines after the Phase 2 trial results, causing shares to plunge 53% to $1.60 per share.
Results showed that ABP-450 reduced less monthly migraine days over a 13 to 24 week period compared to the placebo.

Proceeds from this month’s public offering will support revising the ABP-450 pipeline for other indications outside of migraine research starting with a treatment similar to Botox, according to Forth.

Aeon is seeking regulatory approval from the Food and Drug Administration for ABP-450 as a biosimilar drug to Botox and will present the results from ongoing studies at a Biosimilar Biological Product (BPD) Type 2 meeting this year.

“This is an exciting time for the company as we work towards executing a regulatory pathway that could allow us to bring ABP-450 to the U.S. market for all of Botox’s currently approved and future therapeutic indications under a single FDA approval,” Forth said.

Aeon also terminated Chief Financial Officer Peter Reynolds and appointed Forth as principal financial officer and controller Jennifer Sy as principal accounting officer. Before the cuts, Aeon had around 10 employees.

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Yuika Yoshida
Yuika Yoshida
Yuika Yoshida has been a reporter covering healthcare, innovation and education at the Orange County Business Journal since 2023. Previous bylines include JapanUp! Magazine and Stu News Laguna. She received her bachelor's degree in literary journalism from the University of California, Irvine. During her time at UC Irvine, she was the campus news editor for the official school paper and student writer for the Samueli School of Engineering. Outside of writing, she enjoys musical theater and finding new food spots within Orange County.
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