Novan's IPO on the spot to fund acne drug
- Dermatology company Novan has filed an IPO with an initial target of $60 million to fund its pipeline of ‘nitric oxide on demand’ drugs.
- Nitric oxide has antimicrobial and anti-inflammatory effects, and the Nitricil tunable technology means that Novan’s drugs can release the substance at a variety of concentrations and speeds where needed.
- Novan’s lead product is an acne gel that promises to cut the numbers of non-inflamed and inflamed spots with no serious adverse effects.
Not so long ago, the idea of an initial public offering was a ‘no no’, but for dermatology company Novan, the funding window seems to have opened up. By listing on Nasdaq, the company aims to raise $60 million to further Nitricil, its ‘nitric oxide on demand’ technology that delivers a normally gaseous substance in solid form.
The company reports that the dermatology market was worth $28 billion in 2014, and plans to use the funding to push its lead acne gel, SB204, through to an application for marketing approval with the FDA. SB204 is currently in Phase 3 trials, with results expected in the first quarter of 2017. Novan plans an NDA by the end of 2017.
The funding will be used to support other projects as well. These include two dermatologicals in Phase 2 trials; a topical antiviral for genital warts and a topical broad-spectrum anti-fungal for the treatment of fungal infections of the skin and nails.
The funding will go into the dermatological arm of the company. Novan formed a separate company, KNOW Bio, in 2015 for its non-dermatology assets, according to the SEC filing, but there is little other information in the public domain about the new company.
Acne is tough to treat, with approaches ranging from over-the-counter lotions and potions to prescription oral and topical antibiotics that run the risk of contributing to drug resistance. SB204, in Phase 2 trials, reduced the numbers of whiteheads, blackheads red bumps and pustules, and was well tolerated with no serious adverse events.
There’s a potential market out there for acne, and something that is easy to use, is gentle on the skin, and is effective too, will certainly receive a big thumbs up from the teenagers.
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