On Wednesday, H.C. Wainwright adjusted the price target for AEON Biopharma, Inc (NYSE:AEON), a pharmaceutical company, reducing it to $5.00 from the previous $6.00. Despite the lower price target, the firm maintained a Buy rating on the stock. AEON Biopharma recently provided a financial and business update for the second quarter.
AEON has announced plans to follow a biosimilar pathway, aiming to conduct a Phase 3 study in cervical dystonia to potentially allow for label extrapolation for all approved indications of Botox. The company has submitted a briefing package to the FDA, which includes analytical, pharmacological, and animal studies to support a potential Biologics License Application (BLA).
The company's partner, Daewoong, which is not rated, has been instrumental in generating most of the data that led to approvals for AEON's product ABP-450 in India and Mexico. These countries are known to have less rigorous standards than the U.S. for biosimilar approval.
AEON Biopharma is preparing for an initial advisory meeting with the FDA in the third quarter of 2024 and anticipates starting a Phase 3 study with around 400 patients. The study aims to compare ABP-450 directly with Botox to demonstrate that it is not inferior. Successful clinical data from this study could allow ABP-450 to be considered highly similar to Botox and eligible for all the current Botox indications.
The company has previously indicated that its cash reserves are expected to last until the fourth quarter of 2024. The outcome of the upcoming biosimilar meeting with the FDA is anticipated to provide clarity on the development path and potentially attract the investment necessary to fund the program.
Despite the potential of ABP-450, the uncertainty regarding the funding has led H.C. Wainwright to adjust the price target. The firm expresses continued confidence in the drug's prospects but acknowledges the financial risks involved.
In other recent news, AEON Biopharma has been the focus of several significant developments. The company recently revealed its strategy to conduct a Phase 3 study in cervical dystonia, with the goal of achieving label extrapolation for all of Botox's approved uses. This approach could potentially grant AEON access to the entire Botox market with just one Phase 3 study. In support of this strategy, AEON has scheduled an initial biosimilar advisory meeting with the FDA for early Q3 of 2024.
Further, AEON Biopharma has undergone a significant restructuring involving cost reductions and layoffs to extend its financial runway into Q4 2024. This includes changes in key leadership roles, with CEO Marc Forth taking over as principal financial officer. The strategic reorganization follows the discontinuation of the Phase 2 study of their lead drug candidate, ABP-450.
Investment firm H.C. Wainwright continues to support AEON Biopharma, maintaining a Buy rating but reducing the price target from $18.00 to $6.00. Despite setbacks, H.C. Wainwright remains confident in the potential of ABP-450 and is awaiting further updates on the company's business plans. These developments are part of the recent news surrounding AEON Biopharma.
InvestingPro Insights
As AEON Biopharma, Inc navigates its path towards FDA meetings and potential biosimilar approval, the company's financial metrics and market performance provide additional context for investors. According to real-time data from InvestingPro, AEON's market capitalization stands at a modest $38.73 million, reflecting the company's current standing in the pharmaceutical industry. Despite a notably low P/E ratio of 1.01, which could suggest undervaluation, the adjusted P/E ratio over the last twelve months as of Q2 2024 sits at -0.5, indicating that the company may have faced earnings challenges recently.
The stock's volatility is evident from InvestingPro Data, with a staggering 89.24% drop in price total return over the last six months and an 81.9% decline over the past year. This underscores the high-risk nature of investing in AEON, as highlighted by one of the InvestingPro Tips, which notes that the stock generally trades with high price volatility. Additionally, the company does not pay a dividend, which might be a factor for income-focused investors to consider.
InvestingPro Tips further reveal that analysts do not anticipate AEON to be profitable this year, aligning with the observed financial metrics. For investors seeking more detailed analysis, there are additional InvestingPro Tips available, which could offer deeper insights into AEON's financial health and market prospects.
While the company's strategic efforts towards a biosimilar pathway for ABP-450 are commendable, the financial data and market performance reflect the challenges AEON faces. Investors are encouraged to consider these factors, alongside the company's clinical development plans, when making investment decisions.
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