Aeon Biopharma Inc. believes its botulinum toxin complex, ABP-450, has the potential to be used for the preventative treatment of migraines, among other disorders related to the nervous system.
A $75 million initial public offering proposed by the Newport Beach-based drugmaker could help the discovery-phase company solve a few potential financial headaches of its own.
The 9-year-old company, with roots in Orange County and ties to two of the area’s biggest names in the aesthetics industry—Allergan and Evolus Inc.—on Sept. 17 filed preliminary plans to go public on the Nasdaq, under the ticker AEON.
Terms of the IPO have yet to be set; the offering is being underwritten by Wells Fargo Securities, Cantor, Mizuho Securities and H.C. Wainwright & Co.
$403M Deficit
Proceeds from the offering will be used to fund the ongoing clinical development of ABP-450 for the treatment of migraines, as well as cervical dystonia—a condition involving involuntary muscle contractions of the neck—and gastroparesis, a gastrointestinal disorder characterized by the slowing or stoppage of movement of food and liquid from the stomach to the small intestine.
The funding’s much needed, filings indicate.
Aeon’s registration statement notes the company had an accumulated deficit of $403.1 million as of June 30.
The company expects “to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue to seek regulatory approval for, and begin to commercialize, ABP-450, if approved.”
The company said the IPO funding, plus its $10.6 million cash on hand, will be sufficient to fund its operations for the next year, but it expects to seek additional fundraising for operations after that.
Evolus Ties
The IPO would be the first for an Orange County-based drugmaker since Irvine’s Tarsus Pharmaceutics Inc. (Nasdaq: TARS) raised nearly $90 million a year ago.
Prior to that, the last local drugmaker to go public was Newport Beach’s Evolus (Nasdaq: EOLS), which raised about $60 million in 2018 and subsequently has completed other big funding deals.
Aeon and Evolus count close ties.
Both companies were being spun out of the same parent company, and share the same founder: Robert Grant, former president of Bausch & Lomb’s surgical unit and Allergan Medical. Grant founded Alphaeon Inc. in 2012.
An affiliate of Alphaeon spun out Evolus, which uses the same ABP-450 toxin as Aeon, but for aesthetics purposes under the name Jeuveau. It got FDA approval for its product in the U.S. markets in 2019.
Unlike Evolus, Alphaeon offshoot 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.
The neurotoxin market, split between therapeutic (58%) and aesthetic (42%) treatments, is expected to grow to $8.3 billion in the U.S. by 2026, according to a 2020 Fortune Business Insights report.
Evolus is now valued at about $440 million; its shares currently trade below its IPO price.
Litigation Settled
Both Evolus and Aeon license ABP-450 from Daewoong, a South Korean pharmaceutical manufacturer. Aeon received a $25 million investment from Daewoong about a year ago, and has gotten additional funding from the company.
Those companies have been involved in a variety of trade secret litigation the past few years with another Korean firm, Medytox, which provides Allergan’s Aesthetics division, based in Irvine, with its Botox.
Evolus and its parent company settled their litigation earlier this year, in a deal that included a $35 million payment to Allergan’s parent company, AbbVie, plus royalties on Jeuveau.
Aeon said it settled its own issues with Medytox in June and will issue that company at least 10% of its stock in the IPO, plus “single-digit royalties” on the net sales of licensed products for 15 years.
Notable Names
Aeon only counted six employees as of June, but its exec team and board of directors include some notable names, including:
• Chief Executive Marc Forth, who worked 16 years at Allergan, and was most recently its senior vice president of neurosciences, urology and medical dermatology there. He was responsible for therapeutic uses of Botox at Allergan.
• Chief Financial Officer Chris Carr, former finance chief of Seal Beach-based Dendreon and a controller for Abbott Laboratories.
• Board member Hans Keirstead, chairman and cheif executive of Irvine’s AIVITA Biomedical Inc., a closely watched immuno-oncology company. Keirstead founded and previously served as the chief executive of California Stem Cell Inc.
• Chief Medical Officer Chad Oh, who joined the company in June, was previously vice president for Propharma Group for three years; before that he was vice president of clinical development for Revance Therapeutics, a company with a competing toxin to Aeon’s ABP-450.
The company’s other main competitors in the injectable botulinum toxin pharmaceutical market for therapeutic use are Allergan’s Botox; Dysport, which is marketed by Ipsen Ltd.; and Xeomin, which is marketed by Merz Pharmaceuticals LLC, according to the company’s registration statement.
