Novan Therapeutics, which is researching applications of nitric oxide in treating skin conditions, has closed on $50 million in financing as the Durham, NC, moves its lead drug forward in clinical trials.
New investor Malin Corporation (ISEQ: MLC), an Ireland-based life sciences investment company that went public last week, led the Novan deal, which included participation from Novan’s existing investors. The $50 million investment is double the target Novan initially set last August for the round.
The funding follows Novan’s recent announcement that it has reached the target enrollment of 200 in a Phase 2B study of its lead drug, SB204. Novan is studying the compound as a treatment for acne. The company expects to complete the Phase 2B trials this summer. Novan says a Phase 3 trial could start in early 2016.
The new capital also allows Novan to pursue clinical development of SB206, a topical antiviral drug that the company hopes could treat human papillomavirus infections. Novan says it will start a Phase 2 trial in the second quarter studying the compound as a treatment for external genital warts.
Novan’s research focuses on nitric oxide, a gas whose therapeutic applications include blood pressure regulation and wound healing. But drug developers have struggled to store the compound in a stable form that can be delivered where it is needed as a medical treatment. Novan has developed a way to do just that, president and co-founder Nathan Stasko explained during the recent CED Life Sciences conference in Raleigh, NC.
Novan’s technology is based on research originally from the University of North Carolina at Chapel Hill. Stasko founded the company in 2008 with UNC chemistry professor Mark Schoenfisch. The two were researching nanoparticle technology that could store and release nitric oxide. Novan has more than 25 patents on the technology, 10 of them in the United States. Additional patents are pending.
The company’s early work focused on developing the technology into an antimicrobial coating for medical devices. But the award of military contracts steered the company’s nitric oxide research toward skin treatments, specifically, a topical wound care product for infections incurred in battle. In animal studies, Novan’s nitric oxide technology has shown potential to treat toenail fungus, atopic dermatitis, and chronic wound infections.
At the urging of Neal Hunter, the co-founder of Durham LED lighting company Cree (NASDAQ: CREE), and the founding investor and chairman of Novan, Stasko said the company decided to focus on one area to validate the technology before branching into other areas. Novan settled on acne, which affects an estimated 50 million Americans. In 2012, Novan entered Phase 1 clinical trials on SB204 studying the topical gel in acne.
“It affects a lot of people,” Stasko said. “It affects their quality of life.”