Investors Put $50M Skin in Novan's Game

Novan President Nathan Stasko, Ph.D. Photo courtesy of Novan Therapeutics.

An expanding group of investors has put $50 million worth of skin in the game for Durham-based dermatology products developer Novan Therapeutics.

Novan, a privately held 2010 spinout from the University of North Carolina at Chapel Hill, is creating products that tap the antibacterial properties of nitric oxide, the most valuable of which is the apparent inability of bacteria to develop resistance to it. Novan’s patented Nitricil technology stores the therapeutic compound on engineered macromolecules that can deliver it when and where it’s needed.

The company’s technology was discovered by UNC chemistry professor Mark Schoenfisch, Ph.D., and developed by Novan’s president, Nathan Stasko, Ph.D. The small biopharma has reported success in Phase 2 clinical trials on its topical SB204 acne drug candidate. Novan has also garnered attention for its progress in developing topical gels, creams and ointments to treat a variety of other skin conditions.

In 2014 Novan become a “Buzz of BIO” company for its promising skin-healing technology. It was one of only four companies whose executives were invited to give 15-minute presentations at the 2014 BIO International Convention in San Diego. The annual convention draws as many as 15,000 attendees, and the North Carolina Biotechnology Center routinely organizes a North Carolina Pavilion in which sponsoring companies and organizations from across the state demonstrate the force of the state’s life science sector.

Novan was also among the companies NCBiotech included in a trip to Boston last October, one of several the Biotech Center has arranged to link North Carolina life science companies with venture investors outside the state.

Ireland's Malin Corp. joins Triangle investors

The $50 million infusion was led by new investor Malin Corporation, an Irish group, with strong participation from Novan’s existing private investors throughout the Research Triangle area. The round closed March 27, 2015 at $50 million, including an August 2014 initial filing of $10.3 million.

As part of the transaction, two Malin executives took seats on the Novan board: G. Kelly Martin, former CEO of Elan Corp., and Sean Murphy, former head of corporate M&A and business development for Abbott Laboratories.

Novan also added W. Kent Geer to the board, bringing the total number of directors to eight. Geer is a retired audit partner from Ernst & Young.

Targeting bacterial, viral infections in 2015

Acne is the most common skin disease in the United States, affecting more than 50 million people. Novan expects to complete its current Phase 2b clinical study of SB204 this summer and plans to enter final, Phase 3 testing by 2016.

Stasko says he believes SB204 may be a novel treatment alternative to help curb the overuse of topical and oral antibiotics in patients with acne.

In the next three months Novan also plans to enter a Phase 2 clinical trial of its topical anti-viral candidate, SB206, to treat genital warts caused by human papillomavirus (HPV) infections. About two-thirds of healthy American adults are infected with HPV, and genital warts remain the world’s most common sexually transmitted disease.

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