AEON Biopharma, Inc. Announces Closing of $20.0 Million Underwritten Public Offering

Rhea-AI Summary

AEON Biopharma (NYSE: AEON) has successfully closed its previously announced $20.0 million underwritten public offering on January 7, 2025. The offering consisted of 40,000,000 Common Units priced at $0.50 per unit. Each unit includes one share of Common Stock and two warrants: a Series A and Series B Warrant, both with an exercise price of $0.625.

The Series A Warrants expire after 60 months following stockholder approval, while Series B Warrants expire after 30 months. Aegis Capital Corp., acting as the sole book-running manager, exercised its over-allotment option for 6,000,000 additional Series A and B Warrants. The company plans to use the net proceeds for general corporate purposes and working capital.

Positive

• Secured $20.0 million in gross proceeds through public offering
• Successfully closed the offering with full subscription
• Aegis Capital Corp. exercised over-allotment option, indicating strong demand

Negative

• Significant dilution with 40 million new common units issued
• Additional potential dilution from 80 million warrants if exercised
• Low unit pricing at $0.50 indicates challenging market conditions

Insights

Financial Analyst

This $20 million public offering represents a significant capital raise for AEON Biopharma, but comes with considerable dilution risk. The offering structure of $0.50 per unit, consisting of one common share and two warrants (Series A and B) at a $0.625 exercise price, implies potential future dilution of up to 80 million additional shares if all warrants are exercised. The warrants' exercise price being 25% above the offering price suggests some optimism about future value appreciation.

The deal structure, including both 60-month and 30-month warrant terms, provides the company with extended financing flexibility but also creates a complex capitalization table. With a current market cap of about $7 million, this offering is nearly 3x the company's value, indicating substantial dilution for existing shareholders. The over-allotment exercise for additional warrants further compounds this effect.

For retail investors: Think of this like a company printing new money (shares) to fund its operations. While the cash infusion supports ongoing operations and development of their botulinum toxin biosimilar, the significant increase in potential shares could pressure the stock price. The warrant structure is like giving buyers two separate lottery tickets that could pay off if the stock price rises above $0.625.

Biotech Research Analyst

The capital raise is important for AEON's 351(k) biosimilar pathway development program. This regulatory pathway, specifically for biological products shown to be biosimilar to an FDA-licensed reference product, typically requires less extensive clinical data than traditional approvals but still demands rigorous comparative studies. The $20 million raised should provide operational runway for continued development, though botulinum toxin development programs are complex and resource-intensive.

For non-experts: A biosimilar is like a generic version of a biological drug - in this case, likely targeting Botox. While traditional generic drugs are exact copies, biosimilars are highly similar but not identical versions of complex biological products. The 351(k) pathway AEON is pursuing is specifically designed for these types of products, offering a potentially faster and less expensive route to market compared to developing an entirely new drug.

IRVINE, Calif., Jan. 07, 2025 (GLOBE NEWSWIRE) -- AEON Biopharma, Inc. (NYSE: AEON) (the “Company”), a clinical-stage biopharmaceutical company focused on developing a botulinum toxin complex under a 351(k) biosimilar pathway, today announced the closing of its previously announced firm commitment underwritten public offering. Gross proceeds to the Company were approximately $20.0 million, before deducting underwriting fees and other estimated offering expenses payable by the Company. The offering closed on January 7, 2025.

The offering consisted of 40,000,000 Common Units, each consisting of (i) one (1) share of Common Stock, (ii) one (1) Series A Registered Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $0.625 (the “Series A Warrants”) and (iii) one (1) Series B Registered Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $0.625 (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”). No Pre-Funded Warrants were sold in the offering. The public offering price per Common Unit was $0.50. The initial exercise price of each Series A Warrant is $0.625 per share of Common Stock. The Series A Warrants are exercisable following stockholder approval and expire sixty (60) months thereafter. The number of securities issuable under the Series A Warrants is subject to adjustment as described in more detail in the Company’s Current Report on Form 8-K filed with the SEC in connection with the offering (the “8-K”). The initial exercise price of each Series B Warrant is $0.625 per share of Common Stock or pursuant to an alternative cashless exercise option. The Series B Warrants are exercisable following stockholder approval and expire thirty (30) months thereafter. The number of securities issuable under the Series B Warrants is subject to adjustment as described in more detail in the 8-K.

Solely to cover over-allotments, if any, the Company has granted Aegis Capital Corp. (“Aegis”) a 45-day option to purchase additional shares of Common Stock and/or Warrants of (i) up to 15.0% of the number of shares of Common Stock sold in the offering, (ii) up to 15.0% of the number of Series A Warrants sold in the offering and (iii) up to 15.0% of the number of Series B Warrants sold in the offering. The purchase price per additional share of Common Stock is equal to the public offering price of one Common Unit (less $0.0001 allocated to each full Warrant), less the underwriting discount. The purchase price per additional Warrant is $0.0001. On January 7, 2025, Aegis exercised its over-allotment option with respect to 6,000,000 Series A Warrants and 6,000,000 Series B Warrants.

Aggregate gross proceeds to the Company were approximately $20.0 million. The transaction closed on January 7, 2025. The Company expects to use the net proceeds from the offering, together with its existing cash, for general corporate purposes and working capital.

Aegis Capital Corp. is acting as the sole book-running manager for the Offering on a firm commitment basis. Sichenzia Ross Ference Carmel LLP is acting as counsel to the Company. Kaufman & Canoles, P.C. is acting as counsel to Aegis Capital Corp.

The offering was made pursuant to an effective shelf registration statement on Form S-3 (No. 333-281562) previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on August 21, 2024. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at +1 (212) 813-1010.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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. 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, Health Canada and European Medicines Agency. The product is approved as a biosimilar in Mexico and India. 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, visit www.aeonbiopharma.com.

Forward-Looking Statements

The foregoing material may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements regarding the Company’s product development and business prospects, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

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; (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 SEC, which are available on the SEC’s website at www.sec.gov.

Contacts

Investor Contact:
Corey Davis, Ph.D.
LifeSci Advisors
+1 212 915 2577
cdavis@lifesciadvisors.com

Source: AEON Biopharma

FAQ

How much did AEON Biopharma raise in its January 2025 public offering?

AEON Biopharma raised $20.0 million in gross proceeds through its underwritten public offering that closed on January 7, 2025.

What is the structure of AEON's January 2025 public offering?

The offering consisted of 40,000,000 Common Units at $0.50 per unit, with each unit including one common stock share and two warrants (Series A and B) with $0.625 exercise prices.

What are the terms of AEON's Series A and B Warrants from the 2025 offering?

Series A Warrants expire 60 months after stockholder approval, while Series B Warrants expire after 30 months. Both have an exercise price of $0.625 per share.

How will AEON use the proceeds from its $20 million offering?

AEON plans to use the net proceeds from the offering, combined with existing cash, for general corporate purposes and working capital.

What was the over-allotment option exercised in AEON's 2025 offering?

Aegis Capital Corp. exercised its over-allotment option for 6,000,000 additional Series A Warrants and 6,000,000 Series B Warrants.