AEON Biopharma Surges Despite 'Going Concern' Warning in Q3 Report
Investors focus on a strategic pivot to a biosimilar pathway for its migraine drug, ABP-450, overlooking stark financial disclosures.
Shares of AEON Biopharma, Inc. (NYSE: AEON) climbed more than 3% in morning trading, staging a paradoxical rally after the company’s third-quarter results paired a narrower-than-expected loss with a severe warning about its ability to continue as a “going concern.”
The clinical-stage biopharmaceutical company reported a net loss of $4.5 million, or $0.39 per share, an improvement from the $6.2 million loss reported in the same quarter last year and beating analyst estimates of a $0.43 loss per share. However, the positive earnings surprise was overshadowed by a stark disclosure in its regulatory filings. AEON stated there is “substantial doubt” about its ability to fund operations beyond the next twelve months, a standard accounting flag for potential insolvency.
The warning persisted even as AEON announced a new financing deal, including a $6 million private investment and a note exchange, which it expects will extend its cash runway into the second quarter of 2026. For a company with a market capitalization of just over $10 million, the disclosure presents a significant risk for investors.
Despite the financial uncertainty, investor focus appeared locked on a significant strategic shift for its lead drug candidate, ABP-450, a botulinum toxin product being developed for the treatment of migraines. In its earnings release, AEON announced positive data showing its product has a 100% sequence match to AbbVie's BOTOX®, a critical step in pursuing a biosimilar regulatory pathway.
The company is now pivoting from developing ABP-450 as a novel therapy to positioning it as a direct biosimilar competitor to BOTOX®, which dominates a therapeutic neurotoxin market valued at over $3 billion annually. This move comes after the drug failed to meet its primary endpoint in a Phase 2 study for chronic migraine earlier this year, prompting a strategic re-evaluation.
This new biosimilar approach is seen by some as a more de-risked and potentially faster route to market. AEON has scheduled a meeting with the U.S. Food and Drug Administration (FDA) for November 19, 2025, to discuss the pathway forward. The outcome of this meeting will be a critical near-term catalyst for the company.
“The strategic pivot to a biosimilar pathway for ABP-450 is a game-changer for AEON,” noted one biotech analyst in a research update following the announcement. The sentiment is reflected in analyst ratings, with firms like Aegis Capital reiterating a 'Strong Buy' rating with a $7.20 price target in October, suggesting significant upside from its current share price of approximately $0.94.
The market for migraine treatments is substantial, with over 40 million people in the U.S. suffering from the condition. While neurotoxins are approved for chronic migraine, a large unmet need exists for patients with episodic migraine, a population AEON is also targeting.
AEON’s stock has been highly volatile, trading in a 52-week range of $0.38 to $64.80. The rally on Friday, while modest, indicates that for now, the promise of a clearer regulatory path for its lead asset is outweighing the explicit financial warnings detailed in its quarterly report. The company’s ability to execute on its biosimilar strategy and manage its limited cash reserves will determine whether this investor optimism is justified.