AEON Biopharma Announces $15 Million Financing Transaction and Termination of Forward Purchase Agreements
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Insights
The private placement of $15 million in senior secured convertible notes by AEON Biopharma, Inc. with Daewoong Pharmaceutical Co., LTD is a strategic move that could bolster the company's financial position. The capital injection is earmarked for late-stage clinical development of ABP-450, a botulinum toxin complex and for general working capital purposes. This influx of funds is significant as it demonstrates investor confidence in AEON's pipeline, particularly in the advancement of ABP-450, which has shown promising Phase 2 data in treating episodic migraine.
The termination of the forward purchase agreements (FPAs) is another critical aspect. While this decision could be seen as a loss of potential future funding, it also eliminates future obligations and simplifies the capitalization structure. This simplification may appeal to investors who prefer transparency and a more straightforward equity picture. However, the FPA Providers retaining 6,275,000 shares could dilute existing shareholders' equity, potentially impacting the stock price negatively in the short term.
The clinical-stage biopharmaceutical sector is highly competitive and capital-intensive. AEON's successful end-of-Phase 2 (EOP2) meeting with the FDA and its plans for Phase 3 trials position the company favorably in the market. The ability to move forward with a clear regulatory path is a positive indicator for potential investors and partners. However, the market will be closely monitoring the upcoming interim analysis of the ongoing Phase 2 program for chronic migraine, as this will provide further insights into ABP-450's efficacy and safety profile.
Daewoong's involvement, particularly the appointment of a senior management member to AEON's Board of Directors, could signal deeper strategic collaboration. This relationship may provide AEON with additional expertise and potentially access to new markets, especially in Asia where Daewoong is based. The long-term impact of this partnership will depend on the success of ABP-450's clinical development and the execution of AEON's growth strategy.
AEON's focus on botulinum toxin complex development is part of a broader industry trend towards specialized, targeted therapies. The botulinum toxin market is expected to grow, driven by an increasing number of therapeutic applications beyond cosmetic uses. AEON's ABP-450, if successful, could capture a significant market share, especially in the migraine treatment space where there is a high unmet medical need.
Investors should note that the biotech industry faces high regulatory hurdles and significant research and development costs. While AEON's recent FDA meeting is a positive development, the true test will be the Phase 3 trials' outcomes. These trials are more extensive and expensive and their results will be critical in determining ABP-450's commercial viability. The strategic funding through convertible notes offers flexibility but also indicates potential for future equity dilution when the notes convert, which investors should monitor closely.
-- Termination of the Forward Purchase Agreements simplifies AEON’s capitalization structure --
-- AEON to expand its Board of Directors with appointment of candidate selected by its strategic partner following full funding of transaction --
IRVINE, Calif., March 19, 2024 (GLOBE NEWSWIRE) -- AEON Biopharma, Inc. (“AEON” or the “Company”) (NYSE AMEX: AEON, AEON WS), a clinical-stage biopharmaceutical company focused on developing a proprietary botulinum toxin complex for the treatment of multiple debilitating medical conditions, today announced it has entered definitive agreements relating to a private placement (the "Private Placement") of
The Company also announced today in a separate press release the successful outcome from a productive end-of-Phase 2 (EOP2) meeting with the U.S. Food and Drug Administration (FDA) following the Phase 2 data for ABP-450 in episodic migraine previously released in October 2023, which supports advancing ABP-450 (prabotulinumtoxinA) injection into the planned Phase 3 trials. In addition, the Company announced plans to conduct an interim analysis of the ongoing Phase 2 program for ABP-450 in chronic migraine in the second quarter.
Concurrent with the execution of the agreements for the Private Placement, the Company terminated its forward purchase agreements (each an “FPA” and the counterparties thereto, together, the “FPA Providers”). Under the terms of the negotiated termination, the FPA Providers are entitled to keep the aggregate 6,275,000 shares of the common stock they currently hold as a result of the FPAs and will not be obligated to pay the Company any settlement amount or other fees otherwise due under the FPAs. The Company anticipates termination of the FPAs will help simplify and clarify the Company’s capitalization structure.
Additional information about the Private Placement and the termination of the FPAs will be included in a Current Report on Form 8-K that the Company will file with the Securities Exchange Commission.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any security, nor shall there be any offer, solicitation or sale of any security, in any jurisdiction in which such offering, solicitation or sale would be unlawful.
About ABP-450 (prabotulinumtoxinA) Injection
ABP-450 contains a 900 kDa botulinum toxin type-A complex produced by the bacterium Clostridium botulinum. The active part of the botulinum toxin is the 150 kDa component, and the remaining 750 kDa of the complex is made up of accessory proteins that the Company believes help with the function of the active portion of the botulinum toxin. When injected at therapeutic levels, ABP-450 blocks peripheral acetylcholine release at presynaptic cholinergic nerve terminals by cleaving SNAP-25, a protein integral to the successful docking and release of acetylcholine from vesicles situated within the nerve endings leading to denervation and relaxation of the muscle.
About AEON Biopharma
AEON is a clinical stage biopharmaceutical company focused on developing its proprietary botulinum toxin complex, ABP-450 (prabotulinumtoxinA) injection, or ABP-450, for debilitating medical conditions, with an initial focus on the neurosciences market. AEON recently completed a Phase 2 study of ABP-450 for the treatment of cervical dystonia, released topline data from its Phase 2 study of ABP-450 for the preventive treatment of episodic migraine, and has an ongoing Phase 2 study of ABP-450 for the preventive treatment of chronic migraine. ABP-450 is the same botulinum toxin complex that is currently approved and marketed for cosmetic indications by Evolus under the name Jeuveau. ABP-450 is manufactured by Daewoong in compliance with current Good Manufacturing Practice, or cGMP, in a facility that has been approved by the U.S. Food and Drug Administration, or the FDA, Health Canada and European Medicines Agency, or EMA. AEON has exclusive development and distribution rights for therapeutic indications of ABP-450 in the United States, Canada, the European Union, the United Kingdom, and certain other international territories. The Company has built a highly experienced management team with specific experience in biopharmaceutical and botulinum toxin development and commercialization. To learn more about AEON and the development of its uniquely positioned therapeutic neurotoxin, visit www.aeonbiopharma.com.
Forward-Looking Statements
Certain statements in this press release may be considered forward-looking statements. Forward-looking statements generally relate to future events or AEON’s future financial or operating performance. For example, statements regarding the closing of each installment of the Private Placement, AEON’s expected capital resources and liquidity needs and the anticipated timing of AEON’s clinical results are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "plan", "possible", "forecast", "expect", "intend", "will", "estimate", "anticipate", "believe", "predict", "potential" or "continue", or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by AEON and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (i) the outcome of any legal proceedings that may be instituted against AEON or others; (ii) AEON’s future capital requirements, including with respect to potential obligations pursuant to the forward purchase agreements; (iii) AEON’s ability to raise financing in the future; (iv) AEON’s ability to continue to meet continued stock exchange listing standards; (v) the possibility that AEON may be adversely affected by other economic, business, regulatory, and/or competitive factors; and (vi) other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s filings with the Securities and Exchange Commission (the "SEC"), which are available on the SEC’s website at www.sec.gov.
Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. AEON does not undertake any duty to update these forward-looking statements.
Contacts
Investor Contact:
Corey Davis, Ph.D.
LifeSci Advisors
+1 212 915 2577
cdavis@lifesciadvisors.com
Source: AEON Biopharma
FAQ
What is the purpose of the $15 million Private Placement with Daewoong Pharmaceutical Co., ?
What will happen upon funding of the second installment of the Investment Amount?
What was the outcome of the end-of-Phase 2 meeting with the FDA for ABP-450?
Why did AEON terminate the Forward Purchase Agreements?
When is the Company expected to close the first installment of the Private Placement?
