AEON: Initiating Coverage – Imitation is a Sincere Form of Flattery: Seeking a Botox Biosimilar
By John Vandermosten, CFA
NYSE: AEON
READ THE FULL AEON RESEARCH REPORT
We are initiating coverage of AEON Biopharma, Inc. (NYSE: AEON) with a valuation of $2.00 per share. This value is based on our estimates for successful development and commercialization of ABP-450, a botulinum toxinA (BoNT) similar to Botox and equivalent to Jeuveau, Nabota, and Nuceiva. AEON’s objective is to develop, obtain regulatory approval for, and commercialize a clinically substitutable therapeutic alternative to Botox. Botox has received approval for 16 indications in the United States and Europe. The lack of Botox biosimilars provides an opportunity for AEON to introduce ABP-450, a lower-cost alternative which may carve out share in a mature industry. Botox was first approved in 1989 for two eye-muscle disorders and later in 2002 for its first cosmetic indication.
BoNT is used in both aesthetic and therapeutic settings. Cosmetic applications comprise the majority of volume, with 7.8 million procedures performed by plastic surgeons worldwide. [1] Therapeutic applications comprise about 40% of market size. The BoNT market was estimated to be anywhere from $6 to $10 billion in 2025 depending on the resource, suggesting a therapeutic market value of $3 to $4 billion. Global therapeutic use is estimated to be about 4.9 million procedures and $4.1 billion of market value [2] in 2026. Annual growth for BoNT is expected to be from 7% to 8% over the next several years, with the therapeutic category generating faster growth. Market intelligence company Clarivate identifies chronic sialorrhea, off-label indications, and spasticity as the fastest growing groups.
We think an approved Botox biosimilar could perform well in the market given the large and growing demand base, financial incentives to shift to a lower cost alternative and improved provider and patient economics. Over the last two years, the FDA has moved towards a simpler regulatory pathway to approval for biosimilars. The agency has de-emphasized costly and lengthy comparative clinical efficacy trials and proposed the elimination of interchangeability switching studies along with an increased focus on analytical studies. The goal is to reduce development costs and increase access to competitive biosimilar products. AEON is more favorably positioned than other biosimilar developers. It holds a partnership with Daewoong, which is already manufacturing an FDA approved BoNT approved for aesthetic use. Daewoong’s position reduces both regulatory and commercial risk to AEON’s advancement of ABP-450. Furthermore, BoNT is cash pay in the aesthetic sphere and covered by payors in the therapeutic sphere, creating pricing discrepancies that can negatively impact therapeutic consumers. ABP-450 may solve this through separate pricing and J codes. These competitive advantages are material and position AEON to advance ABP-450 through the regulatory approval process.
While best known for its aesthetic use, Botox is approved to treat twelve therapeutic indications. It is most frequently prescribed for chronic migraine, spasticity, and cervical dystonia. Growth overall and in these indications has ranged from the high single digits to the low double digits. There is also the possibility that new indications could benefit from BoNT’s unique mechanism of action. Studies are either underway or have been conducted for broader coverage of migraine, essential tremor and back pain among other indications.
After injection into the muscle tissue, botulinum toxin is taken up by endocytosis into the cells and then enters the cytoplasm where it cleaves SNAP-25, which blocks neurotransmitter signals. The presence of the neurotoxic protein prevents acetylcholine and other transmitters from being released, thereby causing muscle paralysis or reduced secretion from glands. The effect lasts from three to twelve months, depending upon the condition, as nerve endings regrow and BoNT effects fade. The blockade has a local effect and does not travel far from the injection site. Side effects can include pain, swelling, and bruising at the injection site. Headache may also occur. Serious complications are rare, but may involve symptoms similar to an allergic reaction, vision problems, and loss of bladder control.
AEON has completed analytical studies demonstrating analytical similarity and clinical pharmacology. Analytical work has shown identical primary amino acid sequence between ABP-450 and the reference product, along with structural and functional comparability. Peptide-mapping methods increased the proportion of primary sequence coverage to 98% sequence coverage and 100% amino acid identity across all regions analyzed. The analysis further demonstrated preservation of the disulfide bond architecture required for toxin activation. In another study evaluating degradation under thermal and oxidative stress conditions between ABP-450 and Botox, comparable rates of potency loss and oxidization were measured across methionine sites. These results provide additional evidence of structural comparability in advance of the planned multi-lot comparability study.
AEON recently presented the next stage of its development plan. It expects to submit an investigational new drug (IND) application to the FDA in 4Q:26 followed by a pharmacodynamic (PD) study in 1Q:27. Management believes that it may provide sufficient support to proceed to a 351(k) application without a comparative efficacy study (CES). AEON will also conduct bridging studies for Botox and ABP-450’s comparative trials conducted by Daewoong.
We estimate that there will be approximately 6.1 million therapeutic BoNT 100-unit vials consumed in the United States in 2026, with volumes increasing at a high single-digit rate. For the purposes of our model, a unit is one 100-unit Botox vial of powder that is reconstituted before use. We rely on Clarivate data to guide our estimates and vet the figure by referencing Medicare pricing, Botox volumes, and estimated Botox share in dollars.
AEON’s balance sheet listed cash and equivalents of $3.4 million as of June 30 th , 2026, which was augmented by a net $13.6 million financing in July 2026. The deal includes warrants that could raise an additional $34 million if exercised. Based on our estimates, we believe this is sufficient cash to support operations into 1Q:27.
Daewoong manufactures ABP-450 for AEON and FDA-approved Jeuveau for Evolus. We see the risk of Chemistry, Manufacturing and Controls (CMC) observations during the regulatory review process as materially lower than for other biosimilar candidates. Our forecasts anticipate that if AEON is able to obtain approval for ABP-450, an established biopharmaceutical partner will acquire the company or asset. We reflect this assumption in our valuation and model. A Botox biosimilar should be very attractive for patients and providers based on historical biosimilar penetration, lower cost, greater access, full-label parity and improved economics that incentivize providers to switch.
An important background to our favorable view and thesis on ABP-450 relates to the recent shift in the FDA’s stance on biosimilars. The 351(k) biosimilar pathway governs the licensing and regulation of biological products. In June 2024, the agency issued draft guidance removing the recommendation for clinical switching studies to demonstrate interchangeability. As its view has evolved, later draft documents emphasized the need for analytical studies over clinical trials, citing data showing limited benefit and high cost from this approach. The agency is also moving away from switching studies and granting interchangeability along with approval. We believe these changes will materially reduce the time and cost necessary to gain 351(k) approval, with financial benefits accruing to shareholders.
Key reasons to own AEON Biopharma’s shares:
Developing ABP-450, a potential biosimilar and interchangeable alternative to Botox
Identical product to already approved BoNT Jeuveau
Biosimilar approval may open twelve therapeutic indications to ABP-450 use
Reduced switching costs vs. non-Botox BoNT alternatives
License for exclusive rights for commercialization in US, Canada, UK & EU
Approval pathway forward elucidated by FDA Type 2b meeting minutes
Improved pricing and reimbursement as biosimilar
Benefits from separate ASP calculation not diluted by aesthetics pricing
Anticipated lower price vs. branded BoNT alternatives
Partnership with Daewoong
FDA inspected and assessed manufacturing facility in South Korea
Actively producing Jeuveau
Sophisticated biologics facility with biohazard special handling
Access to four head-to-head clinical studies demonstrating non-inferiority to Botox
ABP-450 approval provides access to $3.5 billion market
Full label parity with Botox
Clinical equivalence will allow for interchangeability
Additional indications possible
Streamlined biosimilar regulatory pathway allows for faster approval & interchangeability
FDA narrowing the requirements for biosimilar approval
Potential for interchangeability to be granted along with agency approval
Analytical work to date demonstrates 100% amino acid sequence identity to Botox
High similarity for all five complex proteins between ABP-450 & Botox
Type 2b meeting defines clinical requirements for biosimilarity
In our initiation report, we provide a historical background to the discovery of botulinum toxin and its source. It explains how researchers theorized about its therapeutic use and were eventually able to obtain FDA approval for the toxin’s use to treat strabismus and blepharospasm. The report presents a description of BoNT, its Clostridium botulinum source and the toxin’s mechanism of action. We look at BoNT side effects and review other determinants when considering therapeutic use of BoNT.
The following section dives into AEON’s pipeline candidate, ABP-450. We look at former studies that were conducted to evaluate the biologic spanning from AEON-generated clinical trials, to analytical studies that have been completed. We review the clinical trials run by Evolus for Jeuveau and also examine the head-to-head trials that were sponsored by Daewoong comparing ABP-450 to Botox in several key indications along with AEON’s own clinical trials in cervical dystonia and headache. One of our most relevant sections addresses the 351(k) biosimilar pathway and the recent changes that are being advanced by the FDA and contemplated by Congress to streamline the biosimilar approval process.
The report then looks at peers and competitors in the BoNT space, reviewing business focus, transactions and other recent events. We include an exhibit that summarizes each of the relevant companies in the space and their business focus along with market information. Our corporate review of AEON summarizes historical milestones for the company and forecasts anticipated clinical and regulatory goals. We provide a narrative that explains AEON’s many relationships, studies completed and path forward to approval for ABP-450. We include management profiles, a review of risks for both the industry and for AEON specifically, and close with our valuation and the assumptions behind our model. Our work generates a valuation of $2.00 per share for AEON Biopharma, Inc. See our full report for comprehensive details.
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[1] International Society of Aesthetic Plastic Surgery (ISAPS) 2024 Global Survey on Aesthetic/Cosmetic Procedures .
[2] Clarivate Market Insights. Therapeutic Botulinum Toxin, December 2025. (p. 44 & 47)