AEON Biopharma, Inc._December 31, 2025
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-40021
AEON Biopharma, Inc.
(Exact name of registrant as specified in its charter)
5 Park Plaza
Suite 1750
Irvine, CA92614
(Address of Principal Executive Offices)
(949) 354-6499
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading symbol Name of Exchange on which registered
Class A common stock, $0.0001 par value per share AEON NYSE American
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price of the registrant's Class A common stock on the last business day of the registrant’s most recently completed second fiscal quarter was approximately $8.7 million.
As of March 23, 2026, there were 25,303,058 of the registrant’s shares of Class A common stock, $0.0001 par value per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for its 2026 Annual Meeting of Stockholders, which the registrant intends to file pursuant to Regulation 14A with the Securities and Exchange Commission no later than 120 days after the registrant’s fiscal year ended December 31, 2025, are incorporated by reference into Part III of this Annual Report on Form 10-K.
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TABLE OF CONTENTS
Page
Part I
Item 1. Business 2
Item 1A. Risk Factors 20
Item 1B. Unresolved Staff Comments 65
Item 1C. Cybersecurity 65
Item 2. Properties 66
Item 3. Legal Proceedings 66
Item 4. Mine Safety Disclosures 67
Part II
Item 6. Reserved 68
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 84
Item 8. Financial Statements and Supplementary Data 85
Item 9A. Controls and Procedures 119
Item 9B. Other Information 120
Part III
Item 10. Directors, Executive Officers and Corporate Governance 121
Item 11. Executive Compensation 121
Item 14. Principal Accounting Fees and Services 121
Part IV
Item 15. Exhibits and Financial Statement Schedules 122
Exhibit Index 123
Signatures 127
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Report”) contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). All statements other than statements of historical facts contained in this Report, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the risks, uncertainties and assumptions. These forward-looking statements are subject to numerous risks, including, without limitation, the following:
● AEON’s public securities’ potential liquidity and trading;
● regulatory developments in the United States and international jurisdictions;
● AEON’s ability to effectively manage the growth of its operations;
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● anticipated results from our analytical studies;
● potential effects of extensive government regulation;
● AEON’s future financial performance and capital requirements;
● AEON’s ability to implement and maintain effective internal controls;
● the impact of supply chain disruptions; and
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this Report, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included elsewhere in this Report are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements included elsewhere in this Report. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements included elsewhere in this Report, they may not be predictive of results or developments in future periods.
Any forward-looking statement that we make in this Report speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Report. For all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Reform Act.
As used in this Report, unless otherwise stated or the context otherwise requires: “we,” “us,” “our,” “AEON,” the “Company,” and similar references refer to AEON Biopharma, Inc. and its subsidiaries, and “common stock” refers to our Class A common stock.
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RISK FACTOR SUMMARY
Our business is subject to numerous risks and uncertainties, including those described in the “Risk Factors” section of this Annual Report. You should carefully consider these risks and uncertainties when investing in our common stock. Some of the principal risks and uncertainties include the following:
● Our business and products are subject to extensive government regulation.
● The price of our common stock may be volatile.
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PART I
Item 1. Business
AEON is a biopharmaceutical company advancing its proprietary botulinum toxin complex ABP-450 as a biosimilar to Botox® (onabotulinumtoxinA) with the goal of achieving full-label United States (“U.S.”) market entry for debilitating medical conditions.
On December 12, 2022, AEON Biopharma Sub, Inc. (formerly known as AEON Biopharma, Inc.) (“Old AEON”) and Priveterra Merger Sub, Inc., a wholly owned subsidiary of Priveterra Acquisition Corp. (“Priveterra”), a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses, entered into a Business Combination and Merger Agreement (the “Business Combination Agreement” or “BCA”) dated December 12, 2022 and amended April 27, 2023.
On July 21, 2023 (the “Closing Date”), the parties consummated the transactions contemplated by the BCA (collectively referred to as the “Merger” or “Business Combination”) in connection with the closing of the Merger (the “Closing”). On the Closing Date, Old AEON merged with Priveterra Merger Sub, Inc., with Old AEON surviving the merger as a wholly owned subsidiary of the Company; and the Company changed its name from “Priveterra Acquisition Corp.” to “AEON Biopharma, Inc.”; and Old AEON changed its name to AEON Biopharma Sub, Inc. The post-Merger Company is referred to herein as “AEON,” or the “Company.”
Following the Closing, the Company’s common stock was listed on the NYSE American under the symbol “AEON” and commenced trading on July 24, 2023.
Unless the context otherwise requires, references to “we”, “us”, “our” and “the Company” refer to the business and operations of AEON Biopharma, Inc. and its consolidated subsidiaries.
Overview
We are a biopharmaceutical company focused on developing ABP-450 as a biosimilar to Botox® (onabotulinumtoxinA) for therapeutic indications. Our strategy is to pursue regulatory approval in the United States through a BLA, under Section 351(k) of the Public Health Service Act (“Section 351(k) BLA”). We hold exclusive development and commercialization rights for ABP-450 in therapeutic indications across the United States, Canada, the European Union, the United Kingdom, and certain other international territories.
Building on this strategy, we are advancing ABP-450 through the 351(k) biosimilar pathway toward a potential Biologics License Application in the United States, targeting the therapeutic botulinum toxin market, which we estimate to be at least $3.3 billion in 2025, and is projected to grow at an annual growth rate of approximately 8%. This large and continually growing market has historically been dominated by a single branded product. ABP-450 is the same botulinum toxin complex that is currently approved as a biosimilar in Mexico, India and Philippines and, in the U.S., is approved to provide temporary improvement in the appearance of moderate to severe glabellar lines for certain adult patients and marketed by Evolus, Inc. under the name Jeuveau® in the U.S. and Nuceiva® in Canada and the European Union, and by Daewoong under the brand name Nabota® in select countries in Asia, Latin America, Middle East and Europe. We have exclusive development and distribution rights for therapeutic uses of ABP-450 in the U.S., Canada, the European Union, the United Kingdom, and certain other international territories. We have established a highly experienced management team with specific experience in biopharmaceutical and botulinum toxin development and commercialization.
ABP-450 is manufactured by Daewoong Pharmaceutical Co., Ltd. in a facility designed to be compliant with current Good Manufacturing Practice (“cGMP”) that has manufactured products approved by the U.S. Food and Drug Administration, Health Canada, and the European Commission. The same botulinum toxin complex is commercially available in multiple international markets and is approved in the United States for aesthetic use under the brand name Jeuveau®. Our development program is focused exclusively on therapeutic indications, where we believe the biosimilar pathway may enable efficient development and broad label access, subject to regulatory review.
The FDA approves biosimilar products under Section 351(k) of the Public Health Service Act, which requires developers to demonstrate that a proposed biosimilar product is highly similar to an approved reference biologic notwithstanding minor differences in clinically inactive components, with no clinically meaningful differences in safety, purity, or potency. A BLA submitted under
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Section 351(k) Demonstration of biosimilarity general requires, among other things, data derived from analytical studies, an assessment of toxicity, and a clinical study or studies, unless the FDA determines any of these studies is not required. In practice, demonstrating comparative analytical similarity to the reference biologic is the scientific foundation of this process, representing the most critical and data-intensive phase of development. Once analytical comparability across key quality attributes is established, subsequent FDA interactions often focus on confirming whether any residual uncertainty requires further clinical assessment.
We held an initial meeting with the FDA in the third quarter of 2024 during which we obtained feedback from the FDA on next steps to develop a Botox® biosimilar. We commenced analytical studies in the fourth quarter of 2024 to prepare for a BPD Type 2a meeting with the FDA that was held in January 2026. During the meeting, the FDA reviewed the Company’s proposed analytical similarity strategy under the 351(k) biosimilar pathway. The FDA acknowledged the scientific challenges associated with characterizing a 900 kDa botulinum neurotoxin complex, provided constructive feedback on our proposed development approach and analytical assessment plan, and noted that our analytical methodologies appeared reasonable to support advancement of the program toward a comprehensive analytical similarity package. We believe this feedback provides a clear framework for the remaining analytical components of its biosimilar development program and plans to complete the majority of its analytical comparability program in 2026. We are currently planning to request a BPD Type 2b meeting in 2026 to discuss the next phase of the development program to support approval of ABP-450 as a biosimilar to Botox® across all approved therapeutic indications.
The initial results from our analytical studies demonstrated:
These results contribute to our assessment of analytical similarity by characterizing key structural attributes of ABP-450 relative to the reference product and are intended to reduce residual uncertainty and potentially limit the need for further clinical assessments. Additional analytical and functional studies are ongoing as part of our broader analytical similarity assessment.
Botulinum toxins represent a well-characterized class of biologic therapeutics with over 230 potential therapeutic uses documented in the published scientific literature and twelve FDA-approved indications in the United States. ABP-450 has been previously evaluated in multiple clinical and preclinical programs, including Phase 2 studies in cervical dystonia and migraine and preclinical work in gastroparesis and neuropsychiatric models. The Phase 2 cervical dystonia program met its primary and key secondary endpoints and, together with its open-label safety extension, provides human clinical data supporting the potential safety and efficacy of ABP-450. We are not currently pursuing additional 351(a) indication-specific development programs, but we retain related intellectual property and know-how that could support future collaborations or lifecycle opportunities.
Daewoong, a South Korean pharmaceutical manufacturer, developed and received approval for Nabota® in 2013 for the treatment of glabellar lines, and as of November 2024 has been approved in 69 countries, under the brand names Nabota®, Clodew®, Beautem®, Nuceiva® and Jeuveau® for the treatment of a number of indications, including glabellar lines, focal upper limb spasticity, crow’s feet line, blepharospasm and benign masseteric hypertrophy.
ABP-450 is the same botulinum toxin as Jeuveau®, which we license from Daewoong, and have exclusive development and distribution rights for therapeutic indications in the U.S., Canada, the European Union, the United Kingdom, and certain other
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international territories. Daewoong licenses the same 900 kDa botulinum toxin to Evolus for cosmetic indications, which Evolus markets and sells under the name Jeuveau® in the United States and Nuceiva® in Canada and the European Union. Prior to licensing the botulinum toxin complex to Evolus, Daewoong conducted a broad preclinical development program for ABP-450 that was primarily focused on safety to support any clinical indication. Subsequently, Evolus completed a comprehensive clinical development program of the same botulinum toxin complex and has received approval from regulatory authorities in the United States, the European Union and Canada to market and sell Jeuveau® in the United States and Nuceiva® in Canada and the European Union for the temporary improvement in the appearance of moderate to severe glabellar, or frown, lines in adults. Over 2,100 adult subjects with moderate to severe glabellar lines at maximum frown participated in Evolus’ clinical development program, and each of Evolus’ Phase 3 clinical studies successfully met their respective primary safety and efficacy endpoints. While none of these preclinical or clinical programs specifically contemplated any therapeutic use of ABP-450, given that the FDA’s regulatory requirements are generally the same for the cosmetic or therapeutic use of a toxin, we believe that the positive data derived from these preclinical and clinical studies will support the clinical development and potential future safety labeling of ABP-450 for our 351(k) biosimilar program, across all labeled dose ranges.
We plan to pursue approval of ABP-450 by submitting a Section 351(k) BLA that exclusively contemplates therapeutic indications for ABP-450, which we believe could improve provider reimbursement for ABP-450, if approved. Existing botulinum toxins, including Botox®, are approved under a single BLA for both therapeutic and cosmetic indications. As a result, other botulinum toxins are required to include the sales prices of both therapeutic and cosmetic botulinum toxin sales when calculating the average selling price, or ASP, that is used to determine the reimbursement amount physicians receive for therapeutic usage. The inclusion of a lower cosmetic sales price in the calculation of ASP can cause physicians that inject for therapeutic applications to lose money when treating patients with existing botulinum toxins and also creates a deterrent to providing payors and/or providers with rebates or other financial incentives. If we are successful in obtaining approval of a Section 351(k) BLA for therapeutic indications of ABP-450, we believe the ASP for ABP-450 would be calculated using only therapeutic sales, which we believe would facilitate consistent and favorable product reimbursement to physicians when they choose to use ABP-450 for therapeutic treatments, as well as the ability to provide payors and/or providers with rebates and other financial incentives. This pricing model would be unique to us within the current therapeutic neurotoxin market, and we believe it would allow physicians to provide treatment with ABP-450 at a more competitive or the same net price as the market leader after rebates and discounts.
We have never been profitable from operations and, as of December 31, 2025, we had an accumulated deficit of $470.8 million. We have never generated revenue from ABP-450. We have concluded that we do not have sufficient cash to fund our operations for 12 months from the date of our financial statements without additional financing, and as a result, there is substantial doubt about our ability to continue as a going concern. As of the date of this Report, we expect to have sufficient cash to fund our operating plan into the third quarter of 2026, including funds of $4.2 million received from the Second Closing (as defined below) in January 2026. Any further development of ABP-450 for any indication, including the biosimilar pathway and any additional studies, will require additional funding, which may not be available to us on reasonable terms, or at all.
We do not expect to receive any revenue from ABP-450 or any future product candidates that we develop unless and until we obtain regulatory approval and commercialize ABP-450 or any future product candidates. We expect to continue to incur significant expenses and increasing net operating losses for the foreseeable future as we seek regulatory approval, prepare for and, if approved, proceed to commercialization of ABP-450.
Overview of the Therapeutic Botulinum Toxin Market
Botulinum toxins are a standard treatment for a number of indications, including debilitating movement disorders, chronic migraine, overactive bladder, excessive salivating and excessive sweating, and are the first-line standard of care for the treatment of certain conditions, including cervical dystonia. The use of botulinum toxins to treat debilitating medical conditions began with the FDA approving Botox® for the treatment of strabismus and blepharospasm, two eye muscle disorders, in adults, in 1989. Botox® was the only FDA-approved type-A botulinum toxin until 2009 when the FDA initially approved Dysport® for the treatment of cervical dystonia and glabellar lines in adults. In 2010, the FDA approved Xeomin® for the treatment of cervical dystonia and blepharospasm in adults. There are currently thirteen therapeutic indications for botulinum toxins that have been approved by the FDA, of which ten are unique therapeutic indications, and nine of which are unique to Botox®.
We are focused on the United States therapeutic botulinum toxin market, which represents the majority of global demand and is the primary market in which we hold development and commercialization rights. According to Clarivate Therapeutic Botulinum Toxin Market Insights (2025), the U.S. therapeutic botulinum toxin market is approximately $3.3 billion in 2025, and is projected to
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grow at an annual growth rate of approximately 8% by increasing procedure volumes, expansion across approved indications, and continued physician and patient adoption.
The market is characterized by physician-administered, buy-and-bill dynamics, in which healthcare providers purchase and are reimbursed for products they administer. As a result, prescribing decisions may be influenced by a combination of clinical considerations, reimbursement, practice economics, operational workflow considerations, and familiarity with existing products. The market spans multiple therapeutic indications, including chronic migraine, spasticity, cervical dystonia, and overactive bladder, and the breadth of a product’s approved label may influence its utilization across these indications.
The United States therapeutic botulinum toxin market is highly concentrated and has historically been dominated by a single branded product, Botox®, which accounted for approximately ~92% of the market in 2024. Approved alternatives, including Dysport® and Xeomin®, have collectively represented a minority share of the market. This concentration reflects established prescribing patterns, physician familiarity, operational considerations, and differences in approved label breadth, as well as the absence of products approved as biosimilars to Botox® in the United States.
Overview of ABP-450
ABP-450 is a di-chain polypeptide, a heavy chain joined by a disulfide bond to a light chain. The light chain is a protease enzyme that attacks fusion proteins at the neuromuscular junction, preventing the vesicles containing acetylcholine from anchoring to the membrane and inhibiting their release. ABP-450 interferes with nerve impulses by inhibiting the release of acetylcholine into the neuromuscular junction, causing a flaccid paralysis of muscles.
The active biologic ingredient in ABP-450 is Clostridium botulinum toxin, type A with a complete molecular complex weight of 900 kDa. Botulinum toxin type A is an active toxin composed of a covalently bonded dimer of two complexes consisting of neurotoxin, non-toxic non-haemagglutinin protein, and haemagglutinin proteins. 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 we believe 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. We believe, ABP-450, if approved, would be the only therapeutic botulinum toxin with significantly similar physiochemical properties as Botox®. In addition, ABP-450 would be the only therapeutic botulinum toxin that shares the same procedure and dilution ratios for the reconstitution of the botulinum toxin to an injectable liquid. These reconstitution procedures are not subject to intellectual property protection. If ABP-450 is approved, we believe the similarity of the two products will facilitate physician adoption of ABP-450 more rapidly and sustainably than other botulinum toxins that compete with Botox®.
Daewoong has constructed a facility in South Korea where it produces ABP-450 and Jeuveau®, which is the same botulinum toxin complex as ABP-450. The manufacture of ABP-450 drug substance is based on the fermentation of Daewoong’s C.botulinum cell line, followed by isolation and purification of the drug substance. The drug substance production facility was purpose built and has successfully completed multiple FDA and EMA regulatory inspections that assessed compliance cGMP standards. We believe this facility will be sufficient to meet demand for ABP-450 for the foreseeable future.
Our Pipeline
AEON is advancing ABP-450 (prabotulinumtoxinA) as a biosimilar to Botox® (onabotulinumtoxinA), targeting full-label U.S. market entry for all the therapeutic indications for which Botox® is approved, other than the cosmetic uses for which we do not hold development or commercialization rights. According to Clarivate Therapeutic Botulinum Toxin Market Insights (2025), the U.S. therapeutic botulinum toxin market is approximately $3.3 billion in 2025, and is projected to grow at an annual growth rate of approximately 8%. Despite its size, the therapeutic toxin market has remained effectively closed to competition due to switching complexity and lack of clinically substitutable alternatives. We believe ABP-450, if approved, has the potential to change this dynamic and enable, for the first time, broad switching across established patients.
AEON's unique position and novel approach:
•Full clinical substitution—If ABP-450 is approved as a biosimilar to Botox® across all its existing approved therapeutic indication ABP-450 would represent a viable substitute to Botox® across all
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therapeutic indications, including chronic migraine, cervical dystonia, blepharospasm, strabismus, overactive bladder, adult and pediatric detrusor overactivity, adult and pediatric upper and lower spasticity and axillary hyperhidrosis, unlike prior competitors.
•Physician adoption at scale - Clinical substitutability could drive physician confidence and operational simplicity—same dosing, dilution, and administration—enabling seamless integration into existing practice.
•Aligned economic incentives - Physicians could benefit from improved buy-and-bill economics, while payers gain a clinically comparable, lower-cost alternative—together expected to enable switching across established patients.
•Globally approved product with scaled manufacturing - ABP-450 is the same botulinum toxin approved in 69+ countries, including in the U.S. (Jeuveau® - marketed by Evolus for aesthetic use), and is supported by a fully scaled, globally validated manufacturing platform.
•Advancing based on FDA feedback following BPD Type 2a - Following its BPD Type 2a meeting, AEON is advancing through a defined, capital-efficient biosimilar pathway toward potential full-label approval.
We held an initial meeting with the FDA in the third quarter of 2024 during which we obtained feedback from the FDA on the next steps to develop a Botox® biosimilar. We commenced analytical studies in the fourth quarter of 2024 to prepare for a BPD Type 2a meeting with the FDA that was held on January 21, 2026. During the meeting, the FDA reviewed the Company’s proposed analytical similarity strategy under the 351(k) biosimilar pathway. The FDA acknowledged the scientific challenges associated with characterizing a 900 kDa botulinum neurotoxin complex, provided constructive feedback on our proposed development approach and analytical assessment plan, and noted that our analytical methodologies appeared reasonable to support advancement of the program toward a comprehensive analytical similarity package. We believe this feedback provides a clear framework for the remaining analytical components of its biosimilar development program and plans to complete the majority of its analytical comparability program in 2026. We are currently planning to request a BPD Type 2b meeting in 2026 to discuss the next phase of the development program to support approval of ABP-450 as a biosimilar to Botox® across all approved therapeutic indications to review the results from the analytical studies, including comparative primary structure analysis and select functional analyses, and present our analytical development plan.
The anticipated level of financing needed for our existing pipeline candidate is highly variable and difficult to project as the required analytical, and potentially clinical, studies, which are our primary cost drivers, will be largely based on the data generated and feedback from the FDA. As of the date of this Report, we expect to have sufficient cash to fund our operating plan into the third quarter of 2026. We are actively attempting to secure additional capital to fund our operations. However, we cannot assure you that we will be able to raise additional capital on commercially reasonable terms or at all. Any further development of ABP-450 for any indication, including the biosimilar pathway and any additional studies in cervical dystonia, will require additional funding, which may not be available to us on reasonable terms, or at all.
Previous Development of our Botulinum Toxin
The same botulinum toxin as ABP-450 has been approved for the cosmetic treatment of moderate to severe glabellar lines in a number of territories. In the United States, Evolus markets and sells the same botulinum toxin as ABP-450 for the cosmetic treatment of moderate to severe glabellar lines under the brand name Jeuveau® and under the brand name Nuceiva® in Canada, the European Union, the United Kingdom, Australia and Switzerland. We believe that the Daewoong and Evolus studies related to the treatment of glabellar lines are relevant to the development of ABP-450 for therapeutic indications for several reasons, including that over 2,100 adults have been injected with a botulinum toxin that is identical or nearly identical to ABP-450 in the context of a clinical study program, generating significant safety, efficacy and non-inferiority data in the cosmetic setting.
Daewoong Preclinical Toxicology Program
In accordance with international guidelines and in consultation with the FDA, Daewoong conducted a broad preclinical development program for ABP-450, including the study of dose concentrations contemplated for multiple therapeutic uses. The program included preclinical efficacy, safety, reproductive toxicity, pharmacological effects, and single and repeat dose toxicity studies of ABP-450. Therefore, if ABP-450 is determined to be a biosimilar to the proposed reference product, then we believe
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additional nonclinical studies would not be needed unless additional safety concerns arise. We may plan to use this information in future biosimilar filings as appropriate.
Daewoong South Korean Clinical Development for Glabellar Lines
In South Korea, Daewoong conducted two clinical studies of Nabota®, a form of the same botulinum toxin as ABP-450, to support its BLA for the cosmetic treatment of moderate to severe glabellar lines to the Korean Ministry of Food and Drug Safety, or MFDS, including one Phase 1 clinical study and one Phase 3 clinical study. Both studies were double-blind, randomized studies with an active control, Botox®. Each study compared 20 units of Nabota® with 20 units of Botox®, injected into each of five target sites in the glabellar region of adult subjects with moderate to severe glabellar lines.
Nabota® was approved by the MFDS for marketing on November 29, 2013 for the treatment of glabellar lines. The Nabota® formulation, which was used in the early South Korean studies, and which was commercialized by Daewoong, is slightly different than the formulation used in the studies sponsored by Evolus. The original Daewoong product was lyophilized and used a different human serum albumin that had not been approved by the FDA or EMA. With the approval of the Evolus vacuum dried product, Jeuveau®, Daewoong has harmonized its product to be the same as the Evolus product and the same as the product that has been used in clinical studies sponsored by us, and is currently used in our biosimilar analytical studies.
Evolus Clinical Development for Glabellar Lines
In 2014, Evolus initiated a comprehensive five-study clinical development program for Jeuveau®, which consists of the same botulinum toxin complex as ABP-450, in the United States, the European Union and Canada to meet the regulatory requirements for a BLA in the United States, marketing authorization application, or MAA, in the European Union, and NDS, in Canada, for the cosmetic treatment of moderate to severe glabellar lines. The Evolus development program included three multicenter, randomized, double-blinded, controlled, single dose Phase 3 clinical studies and two open-label, multiple doses, long-term Phase 2 clinical studies. In each of the studies related to Jeuveau® for the treatment of glabellar lines, the Jeuveau® treatment group showed superiority over the placebo group and, where Botox® was included as an active control, the Jeuveau® treatment group was determined to be non-inferior to Botox®. Between September 2014 and August 2016, over 2,100 adult male and female subjects with moderate to severe glabellar lines at maximum frown participated in this program. Jeuveau® was approved for the cosmetic treatment of moderate to severe glabellar lines by the FDA in February 2019, and the same botulinum toxin was approved under the brand name Nuceiva® by Health Canada in August 2018 and by the European Commission in September 2019.
Daewoong South Korean Clinical Development for Post-Stroke Upper Limb Spasticity
Daewoong has conducted a post-stroke upper-limb spasticity Phase 3 clinical study in South Korea. It was a randomized, double-blind, multi-center, active drug controlled, Phase 3 clinical study to compare the safety and efficacy of up to 360 units of Nabota® to Botox®. Nabota® was found to be non-inferior to Botox® in this study. The result of this study was the basis for registration and approval of Nabota® with the MFDS for the post-stroke upper limb spasticity indication in South Korea.
Patients diagnosed with a stroke at least six weeks prior to the start date of the study and found to be eligible based on the screening test result were randomized to either Nabota® or Botox®. Treatment consisted of intramuscular injections of up to 360 units to the wrist flexor, elbow flexor, finger flexor or thumb-in-palm; the total dose depended on the existence and severity of spasticity. In order to assess efficacy and safety after the treatment, follow-up visits were performed at four, eight and 12 weeks.
The primary endpoint compared the evaluations of the changes in muscle tension values as measured by the Modified Ashworth Scale, or MAS, scores of wrist flexors at four weeks after the injection compared to the scores before treatment. The changes in the wrist flexor MAS assessed by the investigator at four weeks after treatment compared to the baseline in the per protocol analysis group for the primary efficacy assessment were -1.44±0.72 points and -1.46±0.77 points in the Nabota® and Botox® group, respectively. Both groups demonstrated statistically significant decreases (p<0.0001) in muscle tension as measured on the MAS. The difference between the Nabota® and Botox® groups was 0.0129, with a 95% confidence interval (-0.2062, 0.2319). Since the upper limit of the 97.5% one-sided confidence interval of the difference in changes was 0.2319, Nabota® was found to be non-inferior to Botox®. As a secondary endpoint, the average change in muscle tension as measured on the MAS of both groups as compared to baseline, when measured at week 8 and week 12, remained statistically significant at all points in time.
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After administration of the treatment, adverse events occurred in 19.6% of the subjects in the Nabota® group and 19.4% of the subjects in the Botox® group. Adverse drug reactions occurred in 3.1% of the subjects in the Nabota® group and in 4.1% of the subjects in the Botox® group. There was one serious adverse event, a radius fracture that occurred in the Nabota® group, which was assessed as not study drug-related. Botulinum neutralizing antibody testing was conducted using mouse bio-assay, and there were no “positive” subjects found in either group. Nabota® is now approved for post-stroke upper limb spasticity in South Korea.
Daewoong South Korean Clinical Development for Blepharospasm
Daewoong has conducted a blepharospasm Phase 2/3 comparator study in South Korea. It was a randomized, double-blind, multi-center, active drug controlled, Phase 3 clinical study to compare the safety and efficacy of Nabota® to Botox®. This study was the basis for registration and approval of Nabota® with the MFDS for the blepharospasm indication in South Korea. Patients diagnosed with facial spasms prior to the start date of the study and found to be eligible based on the screening test result were randomized to either Nabota® or Botox®. Treatment consisted of intramuscular injections into the medial and lateral pretarsal orbicularis oculi of the upper lid and lateral pretarsal orbicularis oculi of the lower lid of up to 46.88± 9.46 units of Nabota® or 46.86± 9.46 units of Botox®; the total dose depended on the severity of the spasms. In order to assess efficacy and safety after the treatment, follow-up visits were performed at four, eight and 12 weeks.
Our Strategy
Our strategy is to develop and seek regulatory approval of ABP-450 as a biosimilar to Botox® for therapeutic indications in the United States, leveraging an analytical-first development approach under the FDA’s 351(k) pathway. We are focused on executing a disciplined development program designed to support a Section 351(k) BLA and, subject to regulatory feedback, seek potential extrapolation across the approved therapeutic indications for Botox®.
We are advancing a comprehensive analytical similarity program to characterize ABP-450 relative to Botox®, including comparative structural and functional analyses. We have engaged with the FDA through the BPD program, including a BPD Type 2a meeting held in January 2026, and plan to continue regulatory engagement as we execute our development plan. The scope of any additional nonclinical or clinical evaluation will be informed by the results of our analytical program and further discussions with the FDA.
The therapeutic botulinum toxin market has historically been dominated by Botox®, and alternative products have achieved limited adoption in part due to differences in dosing, administration, and product labeling relative to Botox®. These differences may require physicians to adjust established treatment paradigms and practice workflows and may introduce complexity in reimbursement and inventory management in a buy-and-bill setting. In addition, currently available products generally have narrower approved labels, which may further limit their use across indications and contribute to operational and reimbursement considerations for providers.
ABP-450 is being developed as a biosimilar to Botox® under the FDA’s 351(k) pathway, which is intended to establish high similarity to and no clinically meaningful differences from the reference product. If ABP-450 is approved, we believe this pathway may support a product profile that aligns with Botox® across clinically relevant attributes, including dosing and administration, and, subject to regulatory review, may enable extrapolation across multiple therapeutic indications. We believe that a product designed to align with the reference product’s clinical profile and breadth of indications, and that can be positioned within existing reimbursement frameworks, including in a buy-and-bill setting, may enable physicians to integrate ABP-450, if approved, into established practice workflows without requiring changes to dosing or administration protocols. In this setting, reimbursement levels and acquisition costs may influence product selection, and a biosimilar alternative may provide payors with an additional contracting lever while offering providers the potential for predictable reimbursement and practice economics. These factors may reduce barriers to adoption and support patient access.
If approved, we intend to commercialize ABP-450 in the United States within the physician-administered, buy-and-bill therapeutic botulinum toxin market. We hold 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. While our initial focus is on the United States, we may pursue development and commercialization opportunities in select ex-U.S. markets directly or through strategic collaborations.
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Our ability to execute this strategy will depend on the successful advancement of our development program, continued regulatory engagement, and the availability of additional capital to support our operations and development activities.
Our Competitive Strengths
We believe the successful pursuit of our strategy will be driven by the following competitive strengths:
•Well-Established 900 kDa Botulinum Toxin Complex. ABP-450 is the same botulinum toxin complex that has been approved by regulatory authorities in the United States, the European Union, and Canada for a cosmetic indication. To receive these global approvals, Daewoong and Evolus have completed rigorous clinical development programs using Botox® as an active comparator and consistently showed that ABP-450 was non-inferior to Botox® at doses ranging from 20 units to 360 units. While we have not yet demonstrated non-inferiority of ABP-450 to Botox® with respect to therapeutic uses, we expect to design our studies, to evaluate whether one unit of ABP-450 will produce a highly similar effect as one unit of Botox®. ABP-450 has a similar 900 kDa molecular weighting to Botox®, which we believe will facilitate physician adoption of ABP-450, if approved, more rapidly and sustainably than other botulinum toxins that compete with therapeutic uses of Botox®. For example, Dysport® and Xeomin® have molecular weightings of 400 kDa and 150 kDa, respectively, and differences in molecular weightings can result in different clinical outcomes and require physicians to utilize different dilution ratios and injection techniques than they would use with Botox®.
•Differentiated Business Model Designed to Deliver Enhanced Value to Payors and Physicians. We believe our exclusive focus on developing ABP-450 for therapeutic indications provides us with a competitive advantage against current and known prospective botulinum toxin competitors. We believe this focus will enable us to pursue submission of a Section 351(k) dedicated to therapeutic uses of ABP-450 that, if obtained, would allow physicians to receive consistent and favorable reimbursement from payors, while also providing us with the flexibility to provide economic incentives, including rebates, to payors and/or providers. Market competitors that receive marketing approval for their botulinum toxin products have traditionally obtained an original BLA for their initial indication, with follow-on supplemental BLAs as they expand their product labels to include cosmetic and therapeutic indications. As a consequence of that structure, the ASPs for therapeutic reimbursement are negatively affected by promotional activity associated with cosmetic pricing. If we receive approval of a Section 351(k) BLA, we believe that we will not have a negative pricing influence from lower-priced cosmetic indications, which should allow us to uniquely manage our ASP in a manner that enhances value to payors and physicians.
•Management Team with Significant and Relevant Experience and Expertise in the Therapeutic Use of Botulinum Toxins. Our management team has extensive experience in the botulinum toxin market, in the analytical and clinical development of biosimilar products, in development, market launch and commercialization of major medical products, in the execution and integration of business development transactions, and a deep understanding of the regulatory environment of the healthcare markets. Our management team also has a proven history of raising financing in support of our botulinum toxin product candidates, including raising $203 million for investment in AEON since 2019, inclusive of the $6.0 million gross proceeds related to the PIPE financing, $1.8 million of which was received at the First Closing in November 2025 and $4.2 million was received at the Second Closing in January 2026. For more information, see discussion of the offering within “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
Manufacturing
Daewoong is our sole supplier of ABP-450. Daewoong has over 70 years of experience manufacturing pharmaceutical products and is one of the largest pharmaceutical drug companies in South Korea. Daewoong constructed a facility in South Korea for the purposes of producing ABP-450 drug product, which was purpose-built in effort to comply with FDA and EMA regulations. We
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believe this facility will be sufficient to meet demand for ABP-450 for the foreseeable future. The FDA conducted a cGMP and pre-approval inspection of the facility from November 8 to November 17, 2017. The United Kingdom Medicines and Healthcare Products Regulatory Agency also completed an inspection of the manufacturing facility in February 2018 in connection with Evolus’ MAA for Jeuveau®. Evolus’ FDA approval of Jeuveau® in February 2019 included approval to manufacture Jeuveau® at Daewoong’s facility. A separate pre-licensure inspection may be required for any BLA we submit for any of our product candidates.
While Jeuveau® and ABP-450 are both manufactured by Daewoong, both we and Evolus retain separate, independent oversight rights related to Daewoong’s compliance with cGMP regulations, and all other applicable regulatory guidelines and requirements. Evolus retains independent oversight and responsibility for the quality and pharmacovigilance of Jeuveau® under its BLA and related international approvals; similarly, we retain independent oversight and responsibility for the quality and pharmacovigilance of ABP-450, if approved.
Daewoong manufactures the ABP-450 drug substance in a separate facility on the same campus. The manufacture of ABP-450 drug substance is based on the fermentation of Daewoong’s C. botulinum cell line, followed by isolation and purification of the drug substance.
Daewoong is a defendant in several lawsuits brought by Medytox, alleging, among other things, that Daewoong stole Medytox’s botulinum toxin bacterial strain and misappropriated trade secrets of Medytox, including those used by Daewoong to manufacture ABP-450. In June 2021, we settled all outstanding or potential claims between AEON and Medytox and entered into a non-exclusive, royalty-bearing, irrevocable license that permits us to commercialize and manufacture ABP-450. See “Risk Factors — Risks Related to Our Reliance on Third Parties — A material breach by us of the terms of our license and settlement agreement with Medytox, Inc. could have a material adverse effect on our business.”
Daewoong License and Supply Agreement
On December 20, 2019, we entered into the Daewoong Agreement, pursuant to which Daewoong agreed to manufacture and supply ABP-450 and grant us an exclusive license for therapeutic indications to import, distribute, promote, market, develop, offer for sale, and otherwise commercialize or exploit ABP-450 in the United States and its territories and possessions, the European Union, the United Kingdom, Canada, Australia, Russia, the Commonwealth of Independent States, and South Africa, which we refer to collectively as the “covered territories.”
Daewoong has agreed to exclusively supply us with, and we have agreed to exclusively obtain from Daewoong all of our requirements of ABP-450 at agreed-upon transfer prices, with no milestone or royalty payments and no minimum purchase requirements. Daewoong is responsible for all costs related to the manufacturing of ABP-450, including costs related to the operation and upkeep of its manufacturing facility, and we are responsible for all costs related to obtaining and maintaining regulatory approval, including clinical expenses, and commercialization of ABP-450. We are obligated to use commercially reasonable efforts to: (i) obtain all regulatory approvals necessary for ABP-450 to be marketed and commercialized in the covered territories for therapeutic indications and (ii) commercialize ABP-450 in the covered territories for therapeutic indications. During the term of the Daewoong Agreement, we cannot purchase, sell or distribute any injectable botulinum toxin that is launched in the covered territories after the effective date of the Daewoong Agreement other than ABP-450 in the covered territories or sell ABP-450 outside a covered territory.
Under the Daewoong Agreement, Daewoong grants us an exclusive, irrevocable, sub-licensable, assignable, fully paid-up license during the term to use Daewoong’s trademarks to Nabota® in our commercialization and related obligations surrounding marketing authorizations of ABP-450 for therapeutic uses in the covered territories.
The initial term of the Daewoong Agreement is from December 20, 2019 to the later of (i) the fifth anniversary of the grant of approval from the relevant governmental authority necessary to market and sell ABP-450 in the covered territories or (ii) December 20, 2029, and automatically renews for unlimited additional three-year terms thereafter, provided the Daewoong Agreement is not earlier terminated. The Daewoong Agreement will terminate upon written notice (A) by either us or Daewoong upon a continuing default that remains uncured within 90 days (or 30 days for a payment default) by the other party, or (B) immediately upon written notice if the breach is not capable of cure; (C) upon any of the following without notice: (i) our bankruptcy, insolvency or a petition for either, (ii) our assignment of our business or the Daewoong Agreement in whole or in part for the benefit of creditors, (iii) appointment of a receiver over any of our assets not vacated in sixty days, or (iv) filing of any other petition based upon our alleged bankruptcy or insolvency not dismissed within ninety days, or (D) our failure to commercialize or conduct clinical studies related to ABP-450 for a six month period. In the event the license is terminated for either of the reasons listed in (C) or (D) of the foregoing
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sentence, Daewoong will have the right to buy our intellectual property and data, which represents the majority of AEON’s valuable assets, for one dollar ($1.00), which right will terminate in the event Daewoong sells more than fifty percent (50%) of its ownership (inclusive of shares received in connection with the conversion of convertible notes).
We will be the sole owner of any marketing authorization we pursue related to therapeutic indications of ABP-450 in a covered territory. This will include ownership of any BLA that we may submit to the FDA, MAA that we may submit to the EMA, NDS that we may submit to Health Canada, and any other approvals we receive in a covered territory. However, if we do not renew the Daewoong Agreement or upon termination of the Daewoong Agreement due to a breach by us, we are obligated to transfer our rights to Daewoong.
The Daewoong Agreement also provides that Daewoong will indemnify us for any losses arising out of Daewoong’s willful misconduct or gross negligence in performing its obligations under the agreement, Daewoong’s breach of the agreement, or any allegation that ABP-450 or Daewoong’s trademark infringes or misappropriates the rights of a third party, except, in each case, as a result of our willful misconduct or gross negligence. We have agreed to indemnify Daewoong for any losses arising out of our willful misconduct or gross negligence in performing our obligations under the agreement, or our breach of the agreement, except, in each case, as a result of Daewoong’s willful misconduct or gross negligence.
For more information associated with this and other risks, please see “Risk Factors — Risks Related to Intellectual Property and Risks Related to Our Reliance on Third Parties.” Following the settlement between us and Medytox, on July 29, 2022, we amended the Daewoong Agreement and agreed to release any potential indemnification claims associated with the Company’s settlement with Medytox.
Intellectual Property
Our success depends, in part, on our ability to obtain and maintain intellectual property protection related to our product candidate. Our ability to operate without infringing on the proprietary or intellectual property rights of others and to prevent others from infringing our proprietary and intellectual property rights will be important to our performance. We protect, and will continue to protect, our proprietary technology and methods by, among other methods, filing United States and foreign patent applications related to our proprietary technology, inventions, methods of use, and improvements that are important to the development and implementation of our business as well as by maintaining trade secret protection and through other confidentiality procedures.
Under the Daewoong Agreement, Daewoong agreed to exclusively manufacture and supply ABP-450 to us and grant us an exclusive license for therapeutic indications to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit ABP-450 in the covered territories. Daewoong has a United States patent on its proprietary botulinum toxin manufacturing process for ABP-450.
In addition to our reliance on patent protection for ABP-450 and future product candidates, we also rely on our and our licensors’ trade secrets, know-how, confidentiality agreements and continuing technological innovation to develop and maintain our competitive position. Although we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants, these agreements may be breached and we may not have adequate remedies for any breach. In addition, third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology. As a result, we may not be able to meaningfully protect our trade secrets. It is our policy to require our employees, consultants, and other third parties to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual or entity during the course of the party’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees, the agreements provide that all inventions conceived of by the individual during the course of employment, and which relate to or are reasonably capable of being used in our current or planned business or research and development (“R&D”) are our exclusive property. However, such agreements and any security policies may be breached and we may not have adequate remedies for such breaches. For more information, see “Risk Factors — Risks Related to Intellectual Property.”
Competition
The pharmaceutical industry is highly competitive and requires an ongoing, extensive search for technological innovation. It also requires, among other things, the ability to effectively discover, develop, test and obtain regulatory approvals for novel products, as
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well as the ability to effectively commercialize, market and promote approved products, including communicating the effectiveness, safety and value of products to actual and prospective customers and medical professionals. Numerous companies are engaged in the development, manufacture and marketing of products competitive with those that we are developing. Many of our competitors have greater resources than we have. This enables them, among other things, to leverage their financial resources to make greater R&D, marketing and promotion investments than us. Our competitors may also have more experience and expertise in obtaining marketing approvals from the FDA and other regulatory authorities. Our technologies and products may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our competitors.
As more companies develop new intellectual property in our markets, the possibility of a competitor acquiring patent or other rights that may limit our products or potential products increases, which could lead to litigation. In addition to product development, testing, approval and promotion, other competitive factors in the pharmaceutical industry include industry consolidation, product quality and price, product technology, reputation, customer service and access to technical information.
We are currently focusing our clinical efforts on developing ABP-450 as a full-label biosimilar to Botox®. We expect to compete directly with other injectable botulinum toxins and other pharmaceuticals that are currently utilized.
Injectable Botulinum Toxins
Our primary competitors for ABP-450 in the injectable botulinum toxin pharmaceutical market for therapeutic use are Botox®, Dysport®, Xeomin®, and Daxxify®. Botox® is currently the only botulinum toxin approved for twelve indications, including chronic migraine, cervical dystonia, blepharospasm, strabismus, overactive bladder, adult and pediatric detrusor overactivity, adult and pediatric upper and lower spasticity and axillary hyperhidrosis. Dysport®, Xeomin® and Daxxify® have limited labels, each of which are only approved by the FDA for treatment of cervical dystonia, with Dysport® and Xeomin® additionally approved for spasticity, and Xeomin® additionally approved for blepharospasm and chronic sialorrhea. We believe the limited labels, and time and cost to achieve label parity, provides us with the competitive advantage over these competitors to address and minimize switching barriers.
We are aware of competing botulinum toxins currently being developed or commercialized in the United States, the European Union, Asia, South America, and other markets. While some of these products may not meet United States regulatory standards, the companies operating in these markets may be able to produce products at a lower cost than United States and European manufacturers. In addition to the injectable botulinum toxin dose forms, we are aware that other companies are developing topical botulinum toxins for therapeutic indications.
Government Regulation
We operate in a highly regulated industry that is subject to significant federal, state, local and foreign regulation. Our business has been, and will continue to be, subject to a variety of laws and regulations, including those administered by the U.S. Food and Drug Administration (FDA), governing, among other areas, research and development, testing, manufacturing, quality systems, product approvals, labeling, promotion, pharmacovigilance, import/export, privacy, and healthcare reimbursement.
Biological products, including products developed under the biosimilar pathway, are subject to regulation under the Federal Food, Drug, and Cosmetic Act and the Public Health Service Act. If approved, our product candidates would be regulated as biological products, and commercial production would need to occur in appropriately registered and/or licensed facilities operating in compliance with cGMP requirements and biologics regulations. Failure to comply with applicable requirements may subject a company to administrative or judicial enforcement actions, such as refusal to approve pending applications, warning letters, import alerts or detentions, product recalls, seizures, total or partial suspension of production or distribution, withdrawal of approval, injunctions, civil penalties and criminal prosecution.
United States Regulatory Framework for Biosimilars and Interchangeable Biosimilars
The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), amended the Public Health Service Act and created an abbreviated approval pathway for biological and interchangeable products shown to be highly similar to an FDA-licensed reference biological product. “Biosimilarity” is defined to mean that the proposed biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components and that there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity and potency of the product. In addition, a biosimilar may also be determined to be “interchangeable” with a reference biological product, whereby the biosimilar may be substituted for the
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reference product without the intervention of the health care provider who prescribed the reference product. The higher standard of interchangeability must be demonstrated by information sufficient to show that: the proposed product is biosimilar to the reference product; the proposed product is expected to produce the same clinical result as the reference product in any given patient; and for a product that is administered more than once to an individual, the risk to the patient in terms of safety or diminished efficacy of alternating or switching between the biosimilar and the reference product is no greater than the risk of using the reference product without such alternation or switch.
The BPCIA attempts to minimize duplicative testing and thereby lower development costs and increase patient access to affordable treatments. In general, the process required by FDA before a biosimilar biological product may be licensed and marketed in the United States typically involves the following, which may overlap and are highly product- and program-specific:
Once a pharmaceutical candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies, in an effort to support subsequent clinical testing. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for certain studies. Prior to beginning the first clinical trial with a product candidate in the United States, the trial sponsor must submit an IND to the FDA. An IND is a request for allowance from the FDA to introduce an investigational drug into interstate commerce and administer the product to humans. The IND focuses on the investigational plan and protocol(s) for clinical studies and includes, among other things, the results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product candidate, chemistry, manufacturing, and controls information, and any available human data or literature to support the use of the product candidate. An IND must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a full or partial clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin or begin as proposed. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns about ongoing or proposed clinical trials or non-compliance with specific FDA requirements, and trials subject to a clinical hold may not begin or continue as planned until the FDA notifies the sponsor that the hold has been lifted or modified to allow such continuation.
Clinical trials involve the administration of the investigational product to human subjects under the supervision of one or more qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP regulations, which, among other things, include the requirement that all research subjects provide their informed consent in writing for their
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participation in any clinical trial. Clinical trials must be conducted under protocols detailing, among other things, the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND as well as any subsequent protocol amendments. While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
Furthermore, an independent IRB at each institution participating in the clinical trial must review and approve each protocol before a clinical trial commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to each trial subject or his or her legal representative, monitor the study until completed and otherwise comply with IRB regulations. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board or committee, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
FDA Review of Section 351(k) BLAs
FDA approval of a Section 351(k) BLA is required before a biosimilar may be marketed in the United States. The FDA has discretion over the kind and amount of scientific evidence — laboratory, preclinical and/or clinical — required to demonstrate biosimilarity to a licensed biological product. The FDA considers the totality of the evidence, provided by a sponsor to support a demonstration of biosimilarity, and recommends that sponsors use a stepwise approach in the development of their biosimilar products. Biosimilar product applications thus may not be required to duplicate the entirety of preclinical and clinical testing used to establish the underlying safety and effectiveness of the reference biological product. However, the FDA may refuse to approve a biosimilar application if there is insufficient information to show that the active ingredients are the same or to demonstrate that any impurities or differences in active ingredients do not affect the safety, purity or potency of the biosimilar product. In addition, as with original BLAs, biosimilar product applications will not be approved unless the product is manufactured in facilities designed to assure and preserve the biological product’s safety, purity and potency.
Generally, an application for licensure of a biosimilar product pursuant to a Section 351(k) BLA must include information demonstrating biosimilarity based upon the following, unless the FDA determines otherwise:
● animal studies (including the assessment of toxicity); and
In addition, an application submitted under the Section 351(k) pathway must include information demonstrating that:
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Before approving a Section 351(k) BLA, the FDA will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA may inspect one or more clinical trial sites as well as the trial sponsor to assure compliance with GCP requirements. After the FDA evaluates a BLA, it will issue an approval letter or a Complete Response Letter (“CRL”). An approval letter authorizes commercial marketing of the biologic with prescribing information for specific indications. A CRL indicates that the review cycle of the application is complete and the application will not be approved in its present form. A CRL usually describes the specific deficiencies in the BLA identified by the FDA and may require additional clinical data, including additional clinical trials, or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a CRL is issued, the sponsor must resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval.
Post-Approval Requirements
Any products manufactured or distributed pursuant to FDA approvals, including biosimilars, are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual program fees for any marketed products.
Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon application holders and any third-party manufacturers that they may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or clinical studies to assess new safety risks, or imposition of distribution restrictions or other restrictions. Other potential consequences include, among other things:
● fines, warning letters, or untitled letters;
● clinical holds on clinical studies;
● injunctions or the imposition of civil or criminal penalties.
In addition, the FDA closely regulates the marketing, labeling, advertising and promotion of drug products. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the
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provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by the manufacturer and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.
Regulatory Exclusivity Issues for Biologics
The timing of final FDA approval of a biosimilar for commercial distribution depends on a variety of factors, including whether the manufacturer of the reference biological product is entitled to one or more statutory exclusivity periods, during which time the FDA is prohibited from approving any products that are biosimilar to the reference product. The FDA cannot approve a biosimilar application for 12 years from the date of first licensure of the reference product. Additionally, a biosimilar product sponsor may not submit an application under the Section 351(k) pathway for four years from the date of first licensure of the reference product. In certain circumstances, a regulatory exclusivity period can extend beyond the life of a patent and thus block the Section 351(k) BLA from being approved on or after the patent expiration date. In addition, the FDA may under certain circumstances extend the exclusivity period for the reference product by an additional six months if the FDA requests, and the manufacturer undertakes, studies on the effect of its product in children, a so-called pediatric extension.
The first biological product determined to be interchangeable with a branded product for any condition of use is also entitled to a period of exclusivity, during which time the FDA may not determine that another product is interchangeable with the reference product for any condition of use. This exclusivity period extends until the earlier of: (1) one year after the first commercial marketing of the first interchangeable product; (2) 18 months after resolution of a patent infringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeable product, based on a final court decision regarding all of the patents in the litigation or dismissal of the litigation with or without prejudice; (3) 42 months after approval of the first interchangeable product, if a patent infringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeable product is still ongoing; or (4) 18 months after approval of the first interchangeable product if the applicant that submitted the application for the first interchangeable product has not been sued under 42 U.S.C. § 262(l)(6).
United States Healthcare Laws and Compliance Requirements
Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business that may constrain the financial arrangements and relationships through which we research, as well as sell, market, and distribute any products for which we obtain marketing authorization. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, and transparency laws and regulations related to drug pricing and payments and other transfers of value made to physicians and other healthcare providers. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and responsible individuals may be subject to imprisonment.
Coverage, Pricing and Reimbursement
Significant uncertainty exists as to the coverage and reimbursement status of any product candidate for which we may seek regulatory approval. Sales in the United States will depend, in part, on the availability of sufficient coverage and adequate reimbursement from third-party payors, which include government health programs such as Medicare, Medicaid, the 340B Drug Discount program, TRICARE, and the Veterans Administration, as well as managed care organizations and private health insurers. Prices at which we or our customers seek reimbursement for our product candidates can be subject to challenge, reduction or denial by third-party payors. Factors payors consider in determining reimbursement are based on whether the product is:
•a covered benefit under its health plan;
•safe, effective and medically necessary;
•appropriate for the specific patient;
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•cost-effective; and
•neither experimental nor investigational.
The process for determining whether a third-party payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product. A third-party payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be available. Additionally, in the United States there is no uniform policy among payors for coverage or reimbursement. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval processes. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. If coverage and adequate reimbursement are not available, or are available only at limited levels, successful commercialization of, and obtaining a satisfactory financial return on, any product we develop may not be possible.
Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain coverage and reimbursement for any product that might be approved for marketing, we may need to conduct expensive studies in order to demonstrate the medical necessity and cost-effectiveness of any products, which would be in addition to the costs expended to obtain regulatory approvals. Third-party payors may not consider our product candidates to be medically necessary or cost-effective compared to other available therapies or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development.
Healthcare Reform
In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product candidates for which marketing approval is obtained. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. The ACA, enacted in March 2010, has substantially changed healthcare financing and delivery by both governmental and private insurers. Among other things, the ACA included the following provisions:
•an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs;
•an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
•extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
•expansion of eligibility criteria for Medicaid programs;
•expansion of the entities eligible for discounts under the 340B Drug Discount Program;
•a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
•a methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; and
•a licensure framework for follow-on biological products.
Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, in the absence of legislation, the ACA will remain in effect in its current form.
In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included aggregate reductions to Medicare payments to providers, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute will remain in effect through the first 6 months of 2032 unless additional Congressional action is taken. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three
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to five years. On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory cap on drug manufacturers’ Medicaid drug rebate liability beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s average manufacturer price.
Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery models, such as bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their commercial products, which has resulted in several Congressional inquiries and proposed and enacted state and federal legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products. Notably, on August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law. Prescription drug price reform is a focal point of this landmark legislation that incorporates many proposals advanced over the last decade to overhaul drug costs under the Medicare program. Key provisions of the law permit CMS to negotiate Part D drug prices for an increasing number of drugs over a five-year period, replace the Medicare Coverage Gap Discount Program with a new Manufacturer Refund Program for drugs not subject to negotiation, and redesign the Part D benefit to eliminate the coverage gap and realign the cost responsibility in the initial and catastrophic phases of coverage (capping out-of-pocket costs at US$2,000 which began in 2025). In addition, the law penalizes drug manufacturers for price increases that outpace the rate of inflation (for products under Medicare Parts D/B).
Under the Medicare Drug Price Negotiation Program established under the IRA, CMS published the negotiated prices for the initial ten drugs covered under Part D, which went into effect in January 2026, and for the subsequent 15 drugs, which will first be effective in 2027. In addition, CMS has commenced the third cycle of the Medicare Drug Price Negotiation Program, which is associated with the Initial Price Applicability Year 2028 (“IPAY 2028”) and, for the first time, may include drugs payable under Medicare Part B in addition to drugs covered under Medicare Part D. On January 27, 2026, CMS published the list of 15 selected drugs for IPAY 2028, which includes Botox®. CMS has stated that negotiations with participating manufacturers for this third cycle will occur during 2026 and that any negotiated “maximum fair prices” (“MFPs”) will be effective beginning January 1, 2028, and CMS has issued program guidance describing the timing and milestones for the negotiation process, including the exchange of manufacturer-specific data, CMS offers and counteroffers, and publication of negotiated prices. Selection of Botox® for IPAY 2028 and any resulting MFP may affect reimbursement, utilization, contracting, pricing and access dynamics for botulinum toxin therapies, including therapies administered in physician offices and reimbursed under Medicare Part B, and could impact the size, attractiveness, and economics of the therapeutic Botox® market and related competitive markets. CMS’ Negotiation Program guidance indicates that, if CMS later determines that the statutory criteria for bona fide generic or biosimilar competition are met for a selected drug, the drug may be removed from the selected drug list and the MFP may cease to apply in subsequent years, subject to timing mechanics in CMS guidance.
The One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program. Such reductions are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could adversely affect our sales of any product candidate that we commercialize.
In 2026, the U.S. government also launched TrumpRx, a federal initiative to enable patients to gain access to certain prescription drugs at reduced costs based on pricing available in other countries (i.e., most-favored-nation pricing). In addition, the Trump administration is pursuing a two-fold strategy to reduce drug costs in the United States. While it is unclear whether and how the Trump proposals will be implemented, the Trump policies are likely to have a negative impact on the pharmaceutical industry and on our ability to receive adequate revenues for any product candidate that we commercialize. On the one hand, President Trump has threatened to impose significant tariffs on pharmaceutical manufacturers that do not adopt pricing policies such as most favored nation pricing, which would tie the price for drugs in the United States to the lowest price in a group of other countries. In response, multiple manufacturers have entered into confidential pricing agreements with the federal government. On the other hand, the Trump administration is pursuing traditional regulatory pathways to impose drug pricing policies and published two proposed regulations in December 2025, referred to as Globe and Guard. If finalized, these regulations would implement mandatory payment models under which manufacturers of eligible drugs would be required to pay rebates to the federal government on a portion of the units of their drugs that are reimbursed by Medicare, with the rebate amount based on most favored nation pricing. While the impact of the Globe and Guard proposed regulations, if finalized, cannot yet be determined, it is likely to be significant. Even regulatory proposals or executive actions that are ultimately deemed unlawful could negatively impact the U.S. pharmaceutical sector and our business.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access,
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marketing cost disclosure, drug price reporting and other transparency measures. Some states have enacted legislation creating so-called prescription drug affordability boards with the goal of imposing price limits on certain drugs in these states, and at least one state board is imposing an upper payment limit. States are also seeking to implement general, across the board price caps for pharmaceuticals, or are seeking to regulate drug distribution. Some measures are designed to encourage importation from other countries and bulk purchasing. These types of initiatives may result in additional reductions in Medicare, Medicaid, and other healthcare funding, and may otherwise affect the prices we may obtain for our product candidates, if approved. Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition, and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce the ultimate demand for our products, if approved, or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition, and prospects.
Additionally, on May 30, 2018, the Right to Try Act was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical study and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical studies and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.
Another potential area of further healthcare reform is the 340B Drug Pricing Program, which was created by Congress in 1992 to “stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” Drug manufacturers are incentivized to participate in this program as any manufacturer who wants their medication covered by Medicaid must also provide a discount to 340B covered entities, which includes a variety of healthcare entities that must abide by certain eligibility criteria in order to participate. This program requires drug manufacturers to provide outpatient drugs to eligible entities at a significantly discounted price which can result in savings between 20-50% or more.
Growth of the 340B program has continued to accelerate as more entities participate in the program and, thus, more patients qualify for 340B drugs. The value of the drug purchases by covered entities through the 340B program has grown exponentially year-over-year, with 2022 data indicating that discounted drugs purchased through the 340B program reached approximately $53.7 billion annually. In the last decade drug manufacturers have opposed the 340B program publicly, as the program has experienced significant growth which corresponds to greater lost revenue potential for the manufacturers. There is a high degree of legal, legislative and public scrutiny as manufacturers have challenged some aggressive covered entity practices in litigation (with mixed success) and legislative reform proposals seek great transparency and accountability by the participating entities. Nonetheless, there is general industry consensus that the program will remain available in the long-term and there is a reasonable expectation that it will continue to have a material impact on the financial performance of manufacturers as program growth further erodes manufacturer revenue.
We expect that these new laws and other healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies, and additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms and initiatives may prevent us from being able to generate revenue, attain profitability, or commercialize our products, if approved.
Data Privacy and Security Laws and Regulations
We are also subject to data privacy and security regulation by the federal government, states and non- United States jurisdictions in which we conduct our business. For example, HIPAA, as amended by HITECH, and its implementing regulations, imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” those independent contractors or agents of covered entities that create, receive, maintain, transmit, or obtain protected health information in connection with providing a service on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, state and non-United States laws govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
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Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our business activities now and in the future could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including criminal and significant civil monetary penalties, damages, fines, imprisonment, exclusion of products from reimbursement under government programs, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.
For more on the risks associated with data privacy and security, please see “Risk Factors — Risks Related to Government Regulation — We are subject to stringent and often unsettled privacy laws, information security laws, regulations, policies and contractual obligations related to data privacy and security and changes in such laws, regulations, policies and contractual obligations could adversely affect our business.”
Employees
As of December 31, 2025, we had eight employees. Our employees are all on a full-time basis in the United States. None of our employees are represented by a labor union or covered under a collective bargaining agreement, and we believe our relations with our employees are good.
Facilities
Our principal executive office is located at 5 Park Plaza, Suite 1750, Irvine, California 92614. In September 2021, we entered into a lease agreement for 8,000 square feet of office space located at this facility, with a lease term of 36 months beginning in December 2021 and ending in December 2024. In March 2024, we entered into an amendment to extend the lease to an additional five years. We may look for alternate space for our operations, and we believe that suitable alternative space will be available in the future on commercially reasonable terms.
Legal Proceedings
On September 18, 2023, Odeon Capital Group LLC (“Odeon”) filed a lawsuit against us in the Supreme Court of the State of New York, alleging that we failed to pay Odeon’s deferred underwriting fee of $1.25 million, and seeking monetary damages for the full amount of its claimed underwriter fee, punitive damages, attorneys’ fees and other amounts, totaling approximately $1.7 million, which was recorded in other accrued expenses on the consolidated balance sheets as of December 31, 2024. On October 31, 2025, we entered into a settlement agreement with Odeon to settle the lawsuit in exchange for $1.0 million in cash, 267,455 shares of common stock and 125,000 warrants with exercise price of $2.00 and a three-year term. The Company recorded a gain on settlement of $0.4 million to selling, general and administrative expenses on the consolidated statement of operations and comprehensive (loss) income for the year ended December 31, 2025.
On November 20, 2025, Aegis Capital Corp. (“Aegis”) filed a lawsuit against the Company in the Supreme Court of the State of New York, alleging that the Company failed to honor a right of first refusal (the “ROFR”) in Aegis’s favor when AEON raised capital through a self-directed private placement in public equity (“PIPE”). In the complaint, Aegis claimed that AEON misappropriated $1.59 million by not engaging Aegis as its underwriter or bookrunner in the PIPE and seeks punitive damages and attorneys' fees. Aegis was unsuccessful in its attempts to obtain both a temporary restraining order and permanent injunction. AEON filed a motion to dismiss in January 2026, relying upon New York precedent that indicates ROFRs are not operative when a company does not engage any banking partner. Oral argument with respect to the motion to dismiss is scheduled for April 2026.
Item 1A. Risk Factors
RISK FACTORS
We are subject to various risks and uncertainties in the course of our business. You should carefully consider the risks and uncertainties described below and the other information in this report before making an investment in our Class A common stock, par value $0.0001 per share (“common stock”). Our business, financial condition, results of operations, or prospects could be materially and
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adversely affected if any of these risks occurs, and as a result, the market price of our common stockcould decline and you could lose all or part of your investment. This report also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Statement Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forthbelow.
Risks Related to Our Business Operations and Financial Position
We have a limited operating history and have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it.
We are a clinical stage biopharmaceutical company with a limited operating history. Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. Old AEON was originally incorporated in 2012 but did not begin focusing its efforts and financial resources on the clinical development and regulatory approval of ABP-450 for therapeutic indications until 2019. The operating history upon which investors must evaluate our business and prospects is limited. Consequently, any predictions about our future success, performance or viability may not be as accurate as they could be if we had a longer operating history or a history of commercial operations. In addition, as an organization, we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in the biopharmaceutical market. To date, we have not obtained any regulatory approvals for ABP-450 or generated any revenue from product sales relating to ABP-450. On May 16, 2024, we announced the discontinuation of our Phase 2 double blind study of ABP-450 in the treatment of episodic migraine and chronic migraine, which had previously completed enrollment and dosing of patients, and ceased enrollment and dosing of patients in our open label extension study related to such study, in order to implement certain cash preservation measures while the Company continues to evaluate its strategic options. On July 9, 2024, we announced a strategic reprioritization to seek regulatory approval of ABP-450 as a biosimilar product in the United States through submission of a BLA under Section 351(k) of the Public Health Service Act, or a Section 351(k) BLA, using AbbVie Inc.’s product Botox® as the reference product, for all of the indications for which Botox® is approved, other than the cosmetic uses for which we do not hold development or commercialization rights. We held an initial meeting with the FDA in the third quarter of 2024 during which we obtained feedback from the FDA on the next steps to develop a Botox® biosimilar. We commenced analytical studies in the fourth quarter of 2024 to prepare for a BPD Type 2a meeting with the FDA that was held on January 21, 2026, to review the results from the studies.
Because we have not yet received regulatory approvals, we are not permitted to market ABP-450 for any use in the United States or in any other territory, and as such, we have not generated any revenue from sales of ABP-450 to date. We have recorded a loss from operations of $12.8 million for the year ended December 31, 2025, mainly due to loss from operations of $16.3 million and gain on fair value of contingent consideration of $3.5 million. We have recorded operating income of $73.0 million for the year ended December 31, 2024, mainly due to gain on fair value of contingent consideration of $100.8 million and operating expenses of $27.8 million. As of December 31, 2025, we had $3.0 million in cash and cash equivalents. As a result of our ongoing losses, as of December 31, 2025, we had an accumulated deficit of $470.8 million. We expect 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. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity (deficit) and working capital. Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately predict the timing or amount of increased expenses, or when, if at all, we will be able to achieve profitability. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, may adversely affect the market price of common stock and our ability to raise capital and continue operations.
Our management has concluded that uncertainties around our ability to raise additional capital raise substantial doubt about our ability to continue as a going concern. We will require additional financing to fund our future operations. Any failure to obtain additional capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our operations.
We have concluded that we do not have sufficient cash to fund our operations and to meet our obligations as they become due within one year from the date that our consolidated financial statements are issued and as a result, there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is an issue raised as a result of ongoing operating losses and a lack of financing commitments to meet cash requirements, and is subject to our ability to generate a profit or obtain appropriate financing from outside sources, including obtaining additional funding from the sale of our securities or obtaining loans
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from third parties where possible. We will need to raise additional capital to fund our operations. We cannot assure you that we will be able to raise additional capital on commercially reasonable terms or at all. The perception that we may not be able to continue as a going concern may materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise and no assurance can be given that sufficient funding will be available when needed to allow us to continue as a going concern. This perception may also make it more difficult to operate our business due to concerns about our ability to meet our contractual obligations. If we cannot continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that our stockholders may lose some or all of their investment in us.
We expect that we will continue to expend substantial resources for the foreseeable future in order to complete development of and seek regulatory approval for ABP-450 as a biosimilar to Botox®, identify future potential therapeutic applications for ABP-450 and establish sales and marketing capabilities to commercialize ABP-450 across any approved indications.
As of the date of this Report, we expect to have sufficient cash to fund our operating plan into the third quarter of 2026. We have based these estimates, however, on assumptions that may prove to be wrong, and we could spend our available capital resources much faster than we currently expect or require more capital to fund our operations than we currently expect. Our future capital requirements depend on many factors, including:
● costs of operating as a public company.
If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidate(s), technologies, future revenue streams or research programs or may have to grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings or offerings of securities convertible into our equity, the ownership interest of stockholders will be diluted and the terms of any such securities may have a preference over our common stock. Debt financing, receivables financing and royalty financing may also be coupled with an equity component, such as warrants to purchase our capital stock, which could also result in dilution of our existing stockholders’ ownership, and such dilution may be material.
Furthermore, if we raise additional capital through debt financing, we will have increased fixed payment obligations and may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt or making capital expenditures to meet specified financial ratios, and other operational restrictions, any of which could restrict our ability to commercialize ABP-450 or to operate as a business and may result in liens being placed on our assets. If we were to default on any of our indebtedness, we could lose such assets. Additional funding may not be available on acceptable terms, or at all. The global credit and financial markets have experienced volatility and disruptions recently, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic
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stability. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly or more dilutive.
Our future success depends entirely on obtaining U.S. regulatory approval and successfully commercializing ABP-450 as a proposed biosimilar to Botox®, and the biosimilar licensure pathway for a botulinum toxin product is uncertain.
Our future success currently depends entirely on the successful and timely development, licensure and commercialization of ABP-450, our only product candidate. We do not have any products approved for sale and we may never be able to develop and commercialize a marketable product. If we are unable to obtain regulatory approval for ABP-450, or if we experience material delays in doing so, our business, financial condition and results of operations would be materially and adversely affected.
The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of biological products are subject to extensive regulation by the U.S. Food and Drug Administration (FDA) in the United States. We currently plan to pursue licensure for ABP-450 in the United States under the abbreviated pathway for biosimilar biological products under section 351(k) of the Public Health Service Act. Under this pathway, we must demonstrate that ABP-450 is biosimilar to a single FDA-licensed reference product under a stepwise approach, which typically relies on extensive comparative analytical and functional characterization, together with nonclinical testing and clinical investigations, to the extent warranted. The FDA has substantial discretion to determine the nature and extent of data required to support a section 351(k) BLA, including whether and to what extent additional clinical studies are necessary.
The FDA has not licensed a biosimilar or interchangeable biological product referencing Botox® to date. As a result, FDA’s expectations for demonstrating biosimilarity for a botulinum toxin product may be uncertain and may evolve during the course of development and review. The process of preparing, submitting and obtaining approval of a section 351(k) BLA is expensive, time-consuming and inherently uncertain, and can be delayed, limited, or denied for many reasons, including the following:
In addition, the complexity of biological products and the scientific and technical challenges associated with demonstrating high similarity may require significant time and resources. Comparative analytical assessment for a biosimilar product typically requires sensitive, orthogonal methods and sufficient lots of both the proposed product and the reference product. Differences observed during analytical similarity assessment or functional characterization may require additional scientific justification, increased testing, manufacturing changes, new or revised specifications, additional comparability data, or other remediation, any of which could delay development, increase costs, or prevent submission or approval of a Section 351(k) BLA.
Clinical investigations are inherently uncertain and can be delayed, suspended or terminated. Prior to our strategic reprioritization to pursue a biosimilar pathway, our Phase 2 clinical trials for episodic and chronic migraine did not meet their respective primary endpoints and were discontinued. The FDA may consider our prior clinical experience in determining the clinical or other data it will
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require for ABP-450’s development and potential licensure, which could lead the FDA to require additional studies or other data to address residual uncertainty or other concerns. Even if we believe our planned analytical and clinical program is appropriate, the FDA may require additional pre-approval or post-approval studies, may object to elements of our development program, or may require that our program be altered.
Even if we demonstrate biosimilarity for ABP-450 and obtain approval of ABP-450 in one indication, the FDA may not permit extrapolation to additional indications approved for the reference product and may require additional data to support licensure for one or more indications. Any limitation on the indications for which ABP-450 is licensed (for example, exclusion of certain therapeutic indications or constraints on the patient populations eligible for treatment) could materially reduce the commercial opportunity for ABP-450.
In addition to nonclinical and clinical requirements, FDA licensure will depend on the adequacy of our manufacturing and quality systems and those of any third-party manufacturers. We rely on third parties, including Daewoong Pharmaceutical Co., Ltd., for manufacturing ABP-450. The FDA will evaluate whether manufacturing facilities, methods and controls comply with cGMP and are adequate to preserve identity, strength, quality, purity and potency. If the FDA identifies deficiencies during inspections or in our CMC information, it may delay, limit, or deny licensure, require additional remediation or validation work, or require other changes that could materially delay development and commercialization.
Even if we obtain regulatory approval, we may never be able to successfully commercialize ABP-450. Commercial success will depend on, among other things, physician and patient acceptance, payer coverage and reimbursement, contracting dynamics, formulary positioning, competitive responses by the reference product sponsor and other market participants, and our ability to build or access commercialization capabilities. Medicare Part B and other payor reimbursement methodologies (including those based on average sales price (ASP)) are complex and subject to change, and unfavorable coverage or reimbursement decisions, changes in reimbursement methodologies, or other policy developments could materially adversely affect the adoption, pricing, and commercial prospects for ABP-450.
If we are unable to develop and validate a robust comparative analytical similarity and CMC package for ABP-450 consistent with the FDA’s expectations for a 351(k) biosimilar BLA, we may be delayed or prevented from submitting or obtaining approval of a 351(k) BLA, and our business would be materially adversely affected.
Our ability to obtain U.S. licensure for ABP-450 under section 351(k) depends on demonstrating, that ABP-450 is highly similar to an FDA-licensed reference product notwithstanding minor differences in clinically inactive components and that there are no clinically meaningful differences in safety, purity and potency. Comparative analytical and functional characterization and a complete, robust CMC package are generally the foundation of a Section 351(k) BLA submission. If we cannot generate, interpret, or adequately justify the comparative analytical data the FDA expects, or if the FDA determines our control strategy does not assure consistent product quality, we may be required to conduct additional studies, modify our manufacturing process, delay submission of a Section 351(k) BLA, or may be unable to obtain approval.
Demonstrating analytical similarity may be particularly challenging for botulinum toxin products. The potency units of botulinum toxin products are specific to the preparation and assay method utilized and are not interchangeable across products, reflecting the importance and complexity of potency and functional assays and reference standards for this product class. Quantitating the active component and relevant impurities at very low concentrations and correlating those measurements to biological activity may require highly sensitive, validated analytical methods. Developing, qualifying, and validating a set of sensitive and specific assays, including orthogonal methods, to characterize the product and support similarity, may be technologically challenging, time-consuming and costly. The FDA may require additional method development or validation work, additional reference product lots, additional comparability analyses, alternative analytical approaches, or different acceptance criteria.
Our analytical program also depends on obtaining sufficient quantities and lots of the U.S.-licensed reference product for comparative testing, method qualification, and, if required, clinical investigations. Reference product supply constraints, controlled distribution channels, changes in list or net pricing, and other factors may limit our ability to obtain representative lots across time and within shelf life. If we cannot obtain adequate reference product supply, or if the lots we can obtain are not representative, our ability to characterize reference product variability or define appropriate similarity ranges may be compromised and the FDA may not accept our data package.
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In certain circumstances, biosimilar sponsors may seek to use a comparator product approved outside the United States or non-U.S. clinical data to support aspects of development. If we pursue any such approach, the FDA may require additional scientific justification and “bridging” analyses, including three-way comparisons among ABP-450, the U.S.-licensed reference product, and any non-U.S.-licensed comparator product, and the FDA could reject the relevance of such data. Any additional bridging work may be time-consuming and expensive and could delay development and submission.
Even if we obtain adequate reference product supply, natural lot-to-lot variability, potential manufacturing changes over time by the reference product sponsor, and differences in storage, handling, or aging may contribute to variability in analytical results. We must account for such variability when establishing our comparative analytical assessment and setting specifications. If our analytical assessments identify differences that the FDA determines are clinically meaningful or otherwise raise residual uncertainty, the FDA may require additional nonclinical or clinical studies—including clinical pharmacology, immunogenicity, or comparative clinical efficacy studies—to support biosimilarity or to support extrapolation to additional indications.
Stability and comparability also present risk. Differences in stability profiles, aggregation, impurities, container closure performance, or degradation pathways—whether real or apparent based on method limitations—could require reformulation, additional stability work, new specifications, or changes to manufacturing controls. In addition, if we or our manufacturers make changes in manufacturing processes, quality systems, raw materials, sites, or equipment, we may need to generate additional comparability data to demonstrate that the product remains consistent with the material evaluated in our analytical program and any clinical investigations. These requirements could be heightened for a biosimilar program because the analytical similarity determination is a central basis for licensure.
We rely on third parties, including Daewoong Pharmaceutical Co., Ltd., for manufacturing ABP-450. Our ability to generate a consistent analytical comparability package and to support a Section 351(k) BLA also depends on the ability of our manufacturers to produce ABP-450 consistently and in compliance with cGMP, and the FDA may inspect manufacturing facilities in connection with a BLA. Manufacturing deviations, out-of-specification results, control strategy deficiencies, or inspection findings could require remediation, cause delays, result in batch failures or supply interruptions, or prevent submission or approval of a BLA.
If we cannot demonstrate satisfactory analytical similarity and CMC robustness, we may experience delays, incur substantial costs, be forced to narrow the indications or conditions of use we pursue, or be unable to obtain licensure under Section 351(k). Any such outcome could materially harm our commercialization plans and competitive position and could adversely affect coverage, reimbursement, and market adoption dynamics for ABP-450, particularly in settings where physician-administered biologics are sensitive to reimbursement and pricing methodologies.
Clinical development for a proposed biosimilar product involves a lengthy, expensive and uncertain process, including extensive comparative analytical work and potentially clinical investigations; we may incur greater costs than we anticipate or encounter substantial delays or difficulties in our studies.
We may not commercialize, market, promote or sell any product candidate, including ABP-450, in the United States unless and until we obtain regulatory approval from the FDA, and we may never receive such approval. Our current strategy is focused on pursuing a BLA for ABP-450 under the abbreviated pathway for biosimilar biological products under Section 351(k) of the Public Health Service Act. Although the biosimilar pathway differs from the stand-alone 351(a) pathway, it remains an expensive, time-consuming and uncertain process that may take several years and requires significant management attention and financial resources.
To obtain licensure under section 351(k), we must demonstrate that ABP-450 is biosimilar to a single FDA-licensed reference product. Clinical development is generally required to demonstrate biosimilarity.
Clinical investigations are expensive, difficult to design and implement, can take many years to complete, and are uncertain as to outcome. In addition, biosimilar development depends heavily on sophisticated analytical testing and method development, including establishing and validating assays and specifications that are sufficiently sensitive to detect potentially clinically meaningful differences. We cannot guarantee that our analytical studies or clinical investigations will be conducted as planned or completed on schedule, if at all. A failure can occur at any stage, and many companies that have believed their product candidates performed satisfactorily in testing have nonetheless failed to obtain regulatory approval.
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The results from preclinical studies or early clinical investigations of a product candidate may not predict the results of later investigations, and interim results are not necessarily indicative of final results. Product candidates in later stages may fail to show the desired characteristics despite having progressed through earlier testing. In particular, while we have conducted clinical studies evaluating ABP-450 in patients with cervical dystonia and migraines, we do not know whether ABP-450 will perform as expected in future clinical investigations designed to support a biosimilar submission.
Moreover, data generated during a biosimilar program may be susceptible to varying interpretations and analyses. Differences observed during comparative analytical assessment or in clinical pharmacology, immunogenicity, safety or comparative clinical studies could result in the need for additional studies, additional manufacturing work, or changes to our development strategy, any of which could delay or prevent our ability to obtain regulatory approval. For example, our Phase 2 clinical trials for episodic and chronic migraine did not meet their respective primary endpoints. As a result, in May 2024, we announced the discontinuation of our Phase 2 clinical trials for episodic and chronic migraine, in part to implement cash preservation measures. The FDA may consider our prior clinical experience in determining the clinical or other data it will require for ABP-450’s development and licensure, which could lead the FDA to require additional studies or other data to address residual uncertainty or other concerns.
We do not know whether our planned clinical investigations will be completed on schedule, if at all. We may experience numerous unforeseen events prior to, during, or as a result of analytical studies and clinical investigations that could delay or prevent our ability to receive regulatory approval or to commercialize ABP-450 or any other product candidate, including the following:
● subjects experiencing severe or serious unexpected adverse events;
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Any inability to successfully complete our analytical and clinical development program could result in additional costs to us or impair our ability to generate revenue from future product sales or other sources. In addition, if we make manufacturing, formulation or process changes to ABP-450, change facilities, or modify our analytical methods or specifications, we may need to generate additional comparability, stability, analytical, and/or clinical data to bridge our modified product candidate to earlier versions or to demonstrate that such changes do not adversely affect the basis for biosimilarity.
Clinical and analytical delays could also allow competitors to bring competing products to market before we do, reduce the time available for us to execute a commercial launch strategy, and otherwise impair our ability to successfully commercialize ABP-450, which may harm our business, financial condition, results of operations and prospects.
Additionally, if results of our analytical studies or clinical investigations are inconclusive or if there are safety concerns or serious adverse events associated with ABP-450, we may be delayed in obtaining regulatory approval, not obtain regulatory approval at all, obtain approval only in narrower indications or patient populations than intended, obtain approval with labeling that includes significant restrictions or safety warnings, be subject to additional post-marketing testing requirements, have regulatory authorities withdraw or suspend approval, impose restrictions on distribution in the form of a risk evaluation and mitigation strategy (REMS), be sued, or experience damage to our reputation.
Our product development costs will increase if we experience delays in analytical testing, clinical investigations, manufacturing scale-up, or obtaining regulatory approvals. Further, we, the FDA, a foreign regulatory authority (if applicable), an ethics committee or an IRB may suspend our clinical investigations at any time if it appears that we are failing to conduct a study in accordance with regulatory requirements (including GCP), that we are exposing participants to unacceptable health risks, or if the FDA finds deficiencies in our current or planned investigational new drug applications (INDs) or the conduct of these studies. Therefore, we cannot predict with certainty the schedule for commencement and completion of future analytical studies or clinical investigations, including any planned pivotal study, and delays could negatively impact the commercial prospects of ABP-450 and delay our ability to generate revenue.
Additionally, certain of our scientific advisors or consultants who receive compensation from us are likely to be investigators for our future clinical investigations. Under certain circumstances, we may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study. The FDA may therefore question the integrity of the data generated at the applicable clinical study site and the utility of the clinical investigation itself may be jeopardized. This could result in a delay in approval or rejection of our marketing applications and may ultimately lead to denial of regulatory approval of ABP-450.
Enrollment and retention of patients in clinical studies is an expensive and time-consuming process and could be delayed, made more difficult or rendered impossible by multiple factors outside our control. If we experience delays or difficulties in enrolling patients in clinical studies, our clinical development activities could be delayed or otherwise adversely affected.
Identifying and qualifying patients to participate in our clinical studies is critical to our success. We may encounter difficulties in enrolling patients in our clinical studies and may compete against other clinical studies for the same pool of potential patients, thereby delaying or preventing development and potential regulatory approval of ABP-450. Patient enrollment in clinical trials may be affected by other factors, including:
● size and nature of the targeted patient population;
● severity of the disease or condition under investigation;
● perceived risks and benefits of the product candidate under study;
● patient referral practices of physicians;
● the ability to monitor patients adequately during and after treatment;
● proximity and availability of clinical trial sites for prospective patients;
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● our ability to engage with patient communities and advocacy groups;
● continued enrollment of prospective patients by clinical trial sites; and
We also rely on, and will continue to rely on, CROs and clinical trial sites to ensure proper and timely conduct of our clinical trials and preclinical studies. Though we have entered into agreements governing their services, we will have limited influence over their actual performance. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for ABP-450 and any other product candidate and jeopardize our ability to obtain regulatory approval. Furthermore, even if we are able to enroll a sufficient number of patients for our clinical trials, we may have difficulty maintaining enrollment of such patients in our clinical trials.
ABP-450 may cause undesirable side effects or have other properties that could delay or prevent its regulatory approval, limit its commercial potential or result in significant negative consequences following any potential regulatory approval.
During the conduct of clinical studies, patients report changes in their health, including illnesses, injuries and discomforts, to their doctor. Often, it is not possible to determine whether or not the product candidate being studied caused or contributed to these conditions and regulatory authorities may draw different conclusions from us and require additional testing to confirm these determinations, if they occur. Any adverse events or undesirable side effects caused by, or other unexpected properties of, ABP-450 could cause us, any future collaborators, IRB, or ethics committee or regulatory authorities to interrupt, delay or halt clinical studies of ABP-450 and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities.
In addition, it is possible that as we test ABP-450 in further clinical studies, or as use of ABP-450 becomes more widespread if it receives regulatory approval, that illnesses, injuries, discomforts and other adverse events that were not observed in earlier studies conducted by us, or, in the case of ABP-450, by others using the same botulinum toxin, as well as conditions that did not occur or went undetected in previous studies, will be reported by subjects or patients. Many times, side effects are only detectable after investigational products are tested in large-scale pivotal studies or, in some cases, after they are made available to patients on a commercial scale after approval. If additional clinical experience indicates that ABP-450 has side effects or causes serious or life-threatening side effects, the development of ABP-450 may fail or be delayed. Additionally, there is the risk that as botulinum toxins other than ABP-450 are approved for and studied in connection with a broader range of diseases and conditions and across a more diverse population, additional safety signals and other adverse events may be identified. All botulinum toxin products are required to include a class labeling that contains a boxed warning related to safety and we could be required to include additional warnings on our product labeling, if approved.
Additionally, if ABP-450 or any other product candidate receives regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result. For example, the FDA could require us to adopt a REMS to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry. We may also be required to engage in similar actions, such as patient education, certification of health care professionals or specific monitoring, if we or others later identify undesirable side effects caused by any product that we develop. Other potentially significant negative consequences associated with adverse events include:
● regulatory authorities may withdraw or change their approvals of a product;
● we may be required to change the way a product is administered;
● a product may become less competitive, and our reputation may suffer.
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Any of these events could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of ABP-450, if approved by the FDA or other regulatory authorities.
We announced a strategic pivot to pursue regulatory approval for ABP-450 utilizing a 351(k) biosimilar pathway. Obtaining regulatory approvals under this novel approach may prove difficult, or even impossible, for a variety of reasons.
On July 9, 2024, we announced a strategic reprioritization to pursue submission of a Section 351(k) BLA for ABP-450, using AbbVie Inc.’s product Botox® as a proposed reference product, for which we would seek approval for all of the indications for which Botox® is approved, other than the cosmetic uses. To obtain regulatory approval for the commercial sale of ABP-450 as biosimilar product, we will be required to demonstrate to the satisfaction of the FDA, among other things, that ABP-450 is highly similar to a biological reference product already licensed by the FDA pursuant to an approved BLA, notwithstanding minor differences in clinically inactive components, and that it has no clinically meaningful differences as compared to the reference product in terms of the safety, purity and potency of the product.
The potential to leverage the biosimilar pathway for a neurotoxin is untested, as no biosimilar has been approved utilizing Botox® as the reference product. Among other things, Section 351(k) BLAs must include an assessment of toxicity and a clinical study or studies sufficient to demonstrate safety, purity, and potency in one or more appropriate conditions of use for which the reference product is licensed and for which licensure is sought for the proposed biological product. The amount of toxin in a single vial of Botox® is miniscule and comparing toxicity vial-to-vial, which could be required by the FDA, may prove prohibitively difficult.
We plan to pursue the biosimilar pathway for ABP-450 because this pathway offers the potential to obtain FDA approvals for all FDA-approved indications for the reference product. If we are successful in demonstrating the biosimilarity of ABP-450 to Botox® and obtain regulatory approval with respect to one indication, we believe the FDA could also approve ABP-450 for one or more indications currently listed on Botox®’s FDA-approved labeling without our having to conduct additional clinical trials for ABP-450, provided that the FDA determines that ABP-450 relies on a similar mechanism of action to Botox® with respect to each such indication. However, even if we are able to demonstrate that ABP-450 is biosimilar to Botox® with respect to one indication, the FDA may nevertheless determine that certain of Botox® existing approved indications do not rely on a clearly established similar mechanism of action, which would limit our ability to seek approvals for ABP-450 without conducting additional trials. For example, pending FDA feedback, we plan to conduct a single pivotal clinical study in patients with cervical dystonia. And the FDA could determine that a clinical study in cervical dystonia, a muscular disorder, even if successful, will not support a Section 350(k) BLA seeking approval for ABP-450 as a biosimilar in patients with migraine, a neurological disorder, or any of the other therapeutic (non-cosmetic) indications for which Botox® is currently approved. Moreover, negative or ambiguous results from clinical trials of ABP-450 in certain patient populations, including the results from our Phase 2 trials, could adversely affect our ability to pursue certain indications in any Section 351(k) BLA. In addition, pursuant to our agreement with Daewoong, we do not have the rights to develop and commercialize ABP-450 for any of the cosmetic indications for which Botox® has been approved, which further limits the market potential for ABP-450, even if we are successful in pursuing a biosimilar pathway.
Additionally, even if the FDA allows us to pursue a biosimilar pathway for ABP-450, and even if we are successful in demonstrating biosimilarity for ABP-450 to the satisfaction of the FDA, many manufacturers of reference biological products have used legislative, regulatory and other means, such as litigation, to delay regulatory approval and to seek to restrict competition from manufacturers of biosimilars. These efforts may include or have included:
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In addition, any of these factors could prevent us from obtaining market acceptance for or otherwise successfully commercializing ABP-450, if approved as a biosimilar product.
Even if ABP-450 receives regulatory approval as a biosimilar or otherwise, it may fail to achieve the broad degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
Even if ABP-450 receives regulatory approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. The commercial success of ABP-450, if approved, will depend significantly on the broad adoption and use of the resulting product by physicians. The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including but not limited to:
● the effectiveness of sales and marketing efforts;
● the strength of our relationships with patient communities;
● the cost of treatment in relation to alternative treatments and therapies;
● our ability to offer such product for sale at competitive prices;
● the strength of marketing and distribution support;
● the presence or perceived risk of potential product liability claims;
● the prevalence and severity of any side effects; and
● any restrictions on the use of the product together with other medications.
Our efforts to educate physicians, patients, third party payors and others in the medical community on the benefits of our product candidates, if approved, may require significant resources and may never be successful.
If ABP-450 fails to gain market acceptance, this will have a material adverse impact on our ability to generate revenues to provide a satisfactory, or any, return on our investments. Even if some therapeutic indications achieve market acceptance, the market may prove not to be large enough to allow us to generate significant revenues.
Due to our limited resources and access to capital, we must prioritize the regulatory approval for ABP-450 utilizing a 351(k) biosimilar pathway and evaluate the development of certain therapeutic uses of ABP-450; these decisions may prove to be wrong and may adversely affect our business.
While we have shifted our focus to the development and potential commercialization of ABP-450 as a biosimilar to Botox®, a key element of our future strategy is to identify additional conditions for which ABP-450 may warrant further development. However, there can be no assurances that we will be successful in identifying such conditions, such as gastroparesis and PTSD. Even if we are successful in identifying conditions that could potentially be treated with ABP-450, we may experience difficulties in identifying a proper treatment regimen, or we may fail to successfully develop ABP-450 or secure regulatory approval for such conditions.
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Efforts to identify and pursue additional potential therapeutic uses of ABP-450 require substantial technical, financial and human resources, regardless of whether they are ultimately successful. Because we have limited financial and personnel resources, we may forgo or delay pursuit of opportunities with potential target indications that later prove to have greater commercial potential or a greater likelihood of success.
Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. We may focus our efforts and resources on potential therapeutic uses of ABP-450 that ultimately prove to be unsuccessful.
Even if we receive regulatory approval for ABP-450, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, limit or prohibit commercial distribution, prevent continued investigation and research and subject us to penalties if we fail to comply with applicable regulatory requirements. Additionally, ABP-450, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
For any regulatory approvals that we may receive for our ABP-450, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for our product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as ongoing compliance with cGMPs and GCPs for any clinical trials. In addition, manufacturers of biological products and their facilities are subject to continual review and periodic, unannounced inspections by the FDA and other regulatory authorities for compliance with cGMPs and other applicable regulations and standards. In addition, any regulatory approvals we may receive will require the submission of periodic reports to regulatory authorities and ongoing surveillance to monitor the safety and efficacy of the product. Such approvals may also contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements. For example, the FDA may require a Risk Evaluation Mitigation Strategy as a condition of approval of our product candidates, which could include requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.