Novan 'resource alignment' slashes jobs by a fifth
- It's all change again at Novan. In what is described as an "alignment of talent," Novan's CEO Nate Stasko, is moving to the role of president and chief scientific officer, with the non-executive director Kelly Martin taking on the role of interim CEO. Bob Ingram moves from chair of the board to non-executive chair, and Kent Geer becomes lead independent director, while continuing as chair of the audit committee.
- Novan plans to switch its focus towards high impact immunological diseases such as psoriasis and atopic dermatitis, with a Phase 2 trial planned for SB414 in the third quarter of 2017. Despite mixed Phase 3 results for SB204, Novan is still planning to move the acne drug towards submission, with a meeting planned with the Food and Drug Administration to discuss the next steps a during the third quarter of 2017.
- This refocusing onto earlier stage trials, along with the company's very pressing need to cut costs, mean a cut in headcount of around 20%.
Novan has admitted that it is running low on cash, and does not mince its words in its statement: "To be exceedingly clear, the company will require additional capital in order to proceed on broadening the potential application of the science (nitric oxide) and the underlying technology, and specifically to initiate and complete the planned phase 2 trials in both psoriasis and atopic dermatitis. Additional regulatory clarity surrounding SB204 for acne, as well as both SB206 and SB208, will provide important financial and strategic options as to how the Company strengthens its balance sheet and actively manages other financial considerations."
In an announcement in early March, it stated that it had the money to fund operations through to the end of 2017, but that it would need additional funding to get SB204 through the U.S. regulatory process, especially as it would require an additional clinical trial, as well as funding operations beyond 2017. Solutions under review include partnership or private and public equity financings.
The challenge facing SB204, its topical nitric oxide-releasing product candidate, is that the topline results of the two Phase 3 acne studies showed statistical significance in all three co-primary endpoints in one study but only in one of three in the other.
While the company says that it "continues to believe that SB204 for the treatment of acne is a viable drug candidate," it does seem to be switching its focus away from acne and towards other skin disease. The added advantage of moving to psoriasis and atopic dermatitis is that Phase 2 trials will cost less to run than Phase 3 trials. The antiviral and antifungal programs are continuing without much change.
- Novan Statement
Follow Suzanne Elvidge on Twitter