AEON Biopharma (AEON) risk factors, FY2024 10-K

Risks Related to Our Business Operations and Financial Position

1. 01We 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
2. 02drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized
3. 03If ABP-450 fails to demonstrate the requisite safety, purity, potency or biosimilarity in our planned clinical studies or does not gain approval, our business and results of operations will be materially and adversely harmed
4. 04We may not commercialize, market, promote or sell any product candidate, including ABP-450, without obtaining regulatory approval from the FDA or other regulatory agencies, and we may never receive such approvals
5. 05Our product development costs will also increase if we experience delays in testing or obtaining regulatory approvals. We do not know whether any of our preclinical studies or clinical studies will begin as planned, need to be restructured or be completed on schedule, if at all
6. 06ABP-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
7. 07Results of other parties’ clinical studies involving the same or a nearly identical botulinum toxin complex as ABP-450, or results in any preclinical studies we conduct, may not be predictive of future results of our clinical studies
8. 08Interim, topline or preliminary data from our clinical studies that we may announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
9. 09We recently 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
10. 10components, 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
11. 11Even 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
12. 12Our 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
13. 13Due to our limited resources and access to capital, we must prioritize the strategic pivot to pursue 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
14. 14Our 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
15. 15Obtaining coverage and adequate reimbursement approval for a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to the payor
16. 16Enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our products and may affect the prices we may set
17. 17ABP-450, if approved, will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration and expansion
18. 18adult upper limb spasticity, and which has also entered into a collaboration and license agreement with Viatris Inc. to develop and commercialize a biosimilar to Botox
19. 19If we are unable to establish sales and marketing capabilities on our own or through third parties, we will be unable to successfully commercialize ABP-450, if approved, or generate product revenue
20. 20We will need to grow the size of our organization, and we may experience difficulties in managing this growth
21. 21Our employees, independent contractors, consultants, commercial collaborators, principal investigators, vendors and other agents may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements
22. 22Our potential international operations will expose us to risks, and failure to manage these risks may adversely affect our operating results and financial condition
23. 23If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of ABP-450
24. 24If we fail to attract and keep senior management and key scientific personnel, we may be unable to successfully develop ABP-450, conduct our clinical studies and commercialize ABP-450
25. 25Our business involves the use of hazardous materials, and we and our third-party manufacturer and supplier must comply with environmental laws and regulations, which can be expensive and restrict how we do business
26. 26Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
27. 27Changes in tax laws may impact our future financial position and results of operations

Risks Related to our Reliance on Third Parties

1. 28We rely on the Daewoong Agreement to provide us exclusive rights to commercialize and distribute ABP-450 in certain territories. Any termination or loss of significant rights, including exclusivity, under the Daewoong Agreement would materially and adversely affect our development or commercialization of ABP-450
2. 29or inability to effectively operate, the facility and produce products of consistent quality, may harm our ability to compete in our market
3. 30A 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
4. 31We rely, and will continue to rely, on third parties, CROs and consultants to conduct all of our preclinical studies and clinical studies. If these third parties or consultants do not successfully carry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for ABP-450
5. 32Public health outbreaks, epidemics or pandemics (such as the COVID-19 pandemic) may materially and adversely affect our business and operations
6. 33We may use third-party collaborators to help us develop, validate or commercialize any new products, and our ability to commercialize such products could be impaired or delayed if these collaborations are unsuccessful

Risks Related to Intellectual Property

1. 34scientists and management, even if the eventual outcome is favorable to us. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects
2. 35strategies, and patent applications currently being prosecuted may be abandoned by the patent owner without our knowledge or consent
3. 36We may become involved in lawsuits to protect or enforce our intellectual property or the patents and other intellectual property of our licensors, which could be expensive and time-consuming
4. 37We may not be able to protect our intellectual property rights throughout the world
5. 38In addition to seeking patent protection for our product candidates, including ABP-450, we and our licensors also rely on trade secrets protection to protect our and their unpatented know-how, technology and other proprietary information, in order to maintain our and their competitive positions
6. 39We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or asserting ownership of what we regard as our own intellectual property
7. 40If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
8. 41Intellectual property rights do not necessarily address all potential threats

Risks Related to Government Regulation

1. 42Our business and products are subject to extensive government regulation
2. 43If we experience delays in obtaining approval or if we fail to obtain approval of ABP-450, the commercial prospects for ABP-450 may be harmed and our ability to generate revenue will be materially impaired
3. 44Even if we obtain FDA approval for ABP-450 in the United States, we may never obtain approval for or commercialize such candidates in any other jurisdiction, which would limit our ability to realize their full market potential
4. 45not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country
5. 46We 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

Risks Related to Being a Public Company and Ownership of Our Securities

1. 47The price of our common stock may be volatile
2. 48Sales of a substantial number of our securities in the public market by our existing securityholders could cause the price of our common stock and Private Placement Warrants to fall
3. 49Certain existing stockholders of AEON acquired securities at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price or at lower trading prices. Future investors in AEON may not experience a similar rate of return
4. 50Fluctuations in our stock price may yield material changes in the valuation of the underlying derivatives securities associated with our capital structure, including our Contingent Consideration Shares
5. 51We will require additional capital, which additional financing may result in restrictions on our operations or substantial dilution to our stockholders, to support the growth of our business, and this capital might not be available on acceptable terms, if at all
6. 52We may incur significant costs from class action litigation due to the expected stock volatility
7. 53Any failure to meet the continued listing requirements of NYSE American could result in a delisting of our common stock
8. 54Requirement by August 3, 2026, or if the Company does not make progress consistent with the Plan, then the NYSE American will initiate delisting proceedings as appropriate
9. 55We are an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors, which may make it more difficult to compare our performance with other public companies
10. 56Future sales and issuances of our common stock or rights to purchase our common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our common stock price to fall
11. 57The Warrants may never be in the money, and they may expire worthless and the terms of such Warrants may be amended in a manner adverse to a holder if holders of at least a majority of the then-outstanding Warrants approve of such amendment
12. 58Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
13. 59The obligations associated with being a public company involve significant expenses and require significant resources and management attention, which may divert from AEON’s business operations

General Risks

1. 60as a result we manage a number of third-party vendors and other contractors and consultants who have access to our confidential information
2. 61We rely on third parties to provide services and technology necessary for the operation of our business. Any failure of one or more of our vendors, suppliers or licensors to provide these services or technology could have a material adverse effect on our business
3. 62If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline