Novan Therapeutics has pocketed $30 million in new financing as the company ramps up for late-stage clinical trials on its lead drug—a treatment for acne.
Durham, NC-based Novan reported positive Phase 2 clinical trial results for its acne drug, SB204, in September. At that time, the company said it planned to begin enrollment in two Phase 3 studies of the drug in the first quarter of 2016, each trial enrolling 1,300 patients.
According to a securities filing, Novan has raised $30.4 million from 136 investors in its latest round of financing. The company declined to comment on a brief post about the funding by the North Carolina Biotechnology Center. Founded in 2008, Novan raised its first $40 million solely from local angel investors, according to the company’s founding investor and chairman, Neal Hunter. Hunter, who co-founded Durham LED technologies company Cree (NASDAQ: CREE), made the comment while speaking at the University of North Carolina’s Kenan-Flagler Business School in April. Though the identities of the investors in the latest round have not been disclosed, the sheer number of them would imply that the company continues to draw on the support of individuals.
According to regulatory filings, Novan has raised a total of about $103 million, including a $50 million round reported in March, which brought on board new investor Malin (ISEQ: MLC), a life sciences investment firm based in Ireland. At the time, Novan said the funding would support Phase 2 work on its acne drug, and also allow the company to begin Phase 2 clinical trials on SB206, an antiviral that the company is studying as a potential treatment for human papillomavirus infection.
Novan focuses on therapeutic applications of nitric oxide, a compound that is difficult to administer as a drug because it is normally a gas. Novan’s innovation was developing a way to store nitric oxide in a stable form; the company’s acne and HPV drug candidates are administered as topical gels.
Speaking at the annual CED Life Sciences Conference in March, co-founder and President Nathan Stasko said Novan worked for five years to develop its technology. This “druggable nitric oxide” allows for controlled release of the compound, which makes it suitable for therapeutic applications, he said. While nitric oxide has the potential to treat a number of conditions, Novan selected acne as its first target. According to the American Academy of Dermatology, acne is the most common skin disease, affecting up to 50 million Americans annually.
Novan’s technology is based on research from the University of North Carolina at Chapel Hill. Stasko co-founded the company with UNC chemistry professor Mark Schoenfisch; the two were researching nanoparticle technology for storing and releasing nitric oxide.
As Novan gears up for its Phase 3 trial, the company is also preparing to do its own manufacturing, rather than outsource production of its drug candidates for clinical trials. The company plans to start making drugs next summer from a renovated 51,000 square-foot facility near Research Triangle Park, according to the Biotech Center.
Photo courtesy of Flickr user Tracy O. under a Creative Commons license.