Novan, Inc. (“the Company” or “Novan”) (Nasdaq: NOVN), today
announced its financial and operating results for the quarter ended
March 31, 2021 and provided a corporate update.
“We continued to make progress across our
priority pipeline development programs over the course of the first
quarter. With the final Week-12 patient visit completed in our
pivotal Phase 3 study for molluscum, B-SIMPLE4, we continue to work
toward the targeted readout of our topline efficacy and safety data
before the end of June. Additionally, we continue to advance our
preclinical program for COVID-19 and our animal health program,
both targeting data readouts in the second quarter,” commented
Paula Brown Stafford, President and Chief Executive Officer of
Novan. “With a number of near- and long-term milestones ahead, we
believe we are well positioned for an exciting year ahead.”
Recent Highlights
- Announced the final patient
completed their last Week-12 visit in the B-SIMPLE4 pivotal Phase 3
trial for SB206 as a treatment for molluscum contagiosum;
- Appointed Steven D. Skolsky to
Board of Directors, a recognized healthcare and life science
industry leader with over 35 years of international product
development, strategy and commercialization experience; and
- Secured new location to serve as
corporate headquarters and to support various cGMP activities,
including research and development and small-scale manufacturing
capabilities for drug substance and drug product.
Priority Development Pipeline Update
SB206 – A Topical Antiviral Treatment for Viral Skin
Infections (Molluscum Contagiosum)
The Company announced on May 3, 2021 that the
final patient had completed their last Week-12 visit in the
B-SIMPLE4 trial. B-SIMPLE4 is a multi-center, double-blind,
randomized, vehicle-controlled study. The Company exceeded its
enrollment target by randomizing 891 patients (1:1 randomization)
in the study, across 55 clinical sites, due to the number of
patients in screening at the time of achieving the planned
enrollment goal. Patients have been treated for up to 12 weeks with
a follow-up visit at Week 24. The primary endpoint for the study is
the proportion of patients with complete clearance of all treatable
molluscum lesions at Week 12 (Intent-to-Treat or “ITT” population,
where the analysis assumes that patients with missing data at Week
12 are considered treatment failures).
Upcoming Targeted Milestones:
- Topline efficacy and safety results from the B-SIMPLE4 study
continue to be targeted for reporting before the end of the second
quarter of 2021.
- Potential filing of new drug application (“NDA”) targeted no
later than Q3 2022.
There are currently no U.S. Food and Drug
Administration (“FDA”) approved therapies for the treatment of
molluscum. The Company believes that SB206 as a topical, at-home,
self or caregiver-applied therapy with a rapid treatment benefit,
if approved, would satisfy an important patient-care need for the
treatment of molluscum.
For more information about the B-SIMPLE4 study,
please visit clinicaltrials.gov and reference identifier:
NCT04535531.
SB019 – Infectious Disease, Coronaviridae
(COVID-19)
In the fourth quarter of 2020, Novan announced
positive in vitro results showing the potential efficacy of the
Company's NITRICIL™ platform technology, berdazimer sodium
(NVN1000), as an anti-viral against SARS-CoV-2, the virus that
causes COVID-19. The Company initiated in vitro assessments
targeting the reduction of viral burden in differentiated normal
human bronchial epithelial cells. The studies were conducted at the
Institute for Antiviral Research at Utah State University, and
these results demonstrate the first instance of an anti-viral
effect from a nitric oxide-based medicine in a 3-D tissue model
that has similar structure to the human airway epithelium. The
results from the in vitro assessment of concentrations as low as
0.75 mg/mL demonstrated that berdazimer sodium reduced 90% of virus
after repeat dosing, once daily.
Based on the scientific literature and data
available to-date related to berdazimer sodium and Novan’s product
candidate SB206, Novan believes that nitric oxide may inhibit viral
replication by disrupting protein function critical for viral
replication and infection through generation of reactive
intermediates.
Upcoming Targeted Milestones:
- Ongoing preclinical program with
results targeted in the second quarter of 2021.
- Pending results of preclinical
studies, the Company anticipates exploring possible strategic
partners and filing a potential investigational new drug (“IND”)
application with the FDA in 2021.
- Targeting initiating human clinical
trials in the second half of 2021, subject to regulatory guidance
and obtaining additional financing or strategic partnering.
NVN4100 – Companion Animal Health
Novan has initiated exploratory work to evaluate
the Company’s new chemical entity, NVN4100, as a potential product
candidate for antimicrobial indications in companion animal health.
The Company has progressed efforts for initial formulation
development to assess viability and has engaged animal health
experts to assess technical feasibility and market potential.
Upcoming Targeted Milestones:
- Proof-of-concept results from
exploratory in vivo and in vitro assessments targeted for the
second quarter of 2021.
- Pending results of the exploratory
assessment, the Company anticipates engaging with a potential
collaborator or strategic partner to advance development in this
area.
Financial Update
Summary of Financial Results for First
Quarter 2021
- As of March 31, 2021, Novan had a
total cash and cash equivalents balance of $32.7 million and
positive working capital of $32.6 million.
- The Company believes that its
existing cash and cash equivalents balance as of March 31, 2021,
plus expected contractual payments to be received in connection
with existing licensing agreements, will provide it with adequate
liquidity to fund its operating needs into the first quarter of
2022, based on management’s projections and planned priority
development activities described in the Company’s quarterly report
on Form 10-Q for the three month period ended March 31, 2021.
- Novan reported a net loss of $9.0
million for the three months ended March 31, 2021, compared to a
$6.2 million net loss for the same period in 2020.
- License and collaboration revenue
was $0.7 million for the three months ended March 31, 2021,
compared to $1.0 million for the same period in 2020. The decrease
from the prior year related to the change in the Company's
estimated performance period related to the non-refundable upfront
and expected milestone payments under one of the Company’s license
agreements, which was extended during the fourth quarter of
2020.
- Research and development expenses
were $6.4 million for the three months ended March 31, 2021,
compared to $4.9 million for the same period in 2020. The increase
was primarily attributable to (i) net increased costs of $3.3
million related to Novan’s ongoing conduct, active enrollment and
treatment phase activities of the B-SIMPLE4 Phase 3 trial during
the first quarter of 2021, compared to relatively lower cost of
B-SIMPLE1 and B-SIMPLE2 Phase 3 trials wind down activities during
the comparative period in 2020; and (ii) a decrease of $1.5 million
in other research and development expenses, primarily related to
(i) a $1.0 million decrease in research and development personnel
costs, (ii) a $0.4 million decrease in rent and depreciation
expense and (iii) a $0.1 million decrease in material costs
associated with manufacturing.
- General and administrative expenses
were $2.7 million for the three months ended March 31, 2021,
compared to $2.5 million for the same period in 2020. The increase
was primarily due to (i) a $0.3 million increase in insurance
premium expenses associated with the renewal of the Company's
directors' and officers’ liability policies in 2020 and (ii) a $0.2
million increase in other administrative expenses, including
investor and public relations expense, partially offset by (i) a
$0.1 million net decrease in general and administrative personnel
and related costs and (ii) a $0.2 million decrease in rent and
depreciation expense.
About Novan
Novan, Inc. is a clinical development-stage
biotechnology company focused on leveraging its proprietary nitric
oxide (NO) based technology platform, NITRICIL™ to generate
macromolecular New Chemical Entities (NCEs) to treat multiple
indications in dermatology, men’s and women’s health, infectious
diseases and gastroenterology conditions with significant unmet
needs. The Company’s lead product candidate, SB206, a topical
antiviral gel, for the treatment of molluscum contagiosum, is
currently being evaluated in the B-SIMPLE4 pivotal Phase 3 clinical
study. The Company believes that SB206 as a topical, at-home,
caregiver-applied therapy with a rapid treatment benefit, if
approved, would address an important patient-care need for the
treatment of molluscum.
Forward-Looking Statements
Any statements contained in this press release
that do not describe historical facts may constitute
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These statements may be
identified by words such as “believe,” “expect,” “target,”
“anticipate,” “may,” “plan,” “potential,” “will,” and similar
expressions, and are based on the Company’s current beliefs and
expectations. These forward-looking statements include, but are not
limited to, statements related to the potential therapeutic value
of the Company’s NITRICIL™ platform technology, the Company’s
pharmaceutical development of nitric oxide-releasing product
candidates, the Company’s intention to advance development of
certain product candidates, including the timing and progress of
the Company's Phase 3 program to evaluate SB206 for the treatment
of molluscum, the timing of anticipated topline results, the
Company’s expected cash runway, the timing of anticipated results
of the Company’s preclinical development programs, and the
Company’s intention to partner with third parties. Forward-looking
statements are subject to a number of risks and uncertainties that
could cause actual results to differ materially from the Company’s
expectations, including, but not limited to, risks and
uncertainties in the Company’s ongoing or future product
development activities and preclinical studies, which may not prove
successful in demonstrating proof-of concept, or may show adverse
toxicological findings, and even if successful may not necessarily
predict that subsequent clinical trials will show the requisite
safety and efficacy of the Company’s product candidates; any
operational or other disruptions as a result of the COVID-19
pandemic, including any delays or disruptions to the conduct of the
B-SIMPLE4 Phase 3 trial; the Company’s ability to enter into
arrangements with third parties to support its development efforts
on terms that are acceptable to the Company or at all; risks and
uncertainties in the clinical development process, including, among
others, length, expense, ability to enroll patients, potential for
delays or other impacts, whether as a result of the COVID-19
pandemic or other factors, and that results of earlier research and
preclinical or clinical trials may not be predictive of results,
conclusions or interpretations of later research activities or
additional trials; risks related to the regulatory approval
process, which is lengthy, time-consuming and inherently
unpredictable, including the risk that the Company’s product
candidates may not be approved or that additional studies may be
required for approval or other delays may occur, that the Company
may not have sufficient quantities of drug substance and/or drug
product to support regulatory submissions and that the Company may
not obtain funding sufficient to complete the regulatory or
development process; the Company’s ability to obtain additional
funding or enter into strategic or other business relationships
necessary or useful for the further development of the Company’s
product candidates; risks related to the manufacture of raw
materials, including the Company’s active pharmaceutical ingredient
and drug product components utilized in clinical trial materials,
including supply chain disruptions or delays, failure to transfer
technology and processes to third parties effectively or failure of
those third parties (or the Company in connection with the upfit of
the Company’s new facility) to obtain approval of and maintain
compliance with the FDA or comparable regulatory authorities; the
Company’s reliance on arrangements with third parties to support
its operations and development efforts and the risk that such
parties will not successfully carry out their contractual duties or
meet expected deadlines; and other risks and uncertainties
described in the Company’s annual report filed with the Securities
and Exchange Commission on Form 10-K for the twelve months ended
December 31, 2020, and in the Company’s subsequent filings with the
Securities and Exchange Commission. Such forward-looking statements
speak only as of the date of this press release, and Novan
disclaims any intent or obligation to update these forward-looking
statements to reflect events or circumstances after the date of
such statements, except as may be required by law.
NOVAN, INC.Condensed
Consolidated Statements of Operations and Comprehensive
Loss(unaudited)(in thousands,
except share and per share amounts)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
License and collaboration revenue |
$ |
747 |
|
|
|
$ |
1,024 |
|
Government research contracts and
grants revenue |
72 |
|
|
|
189 |
|
Total revenue |
819 |
|
|
|
1,213 |
|
Operating expenses: |
|
|
|
Research and development |
6,418 |
|
|
|
4,916 |
|
General and administrative |
2,686 |
|
|
|
2,507 |
|
Total operating expenses |
9,104 |
|
|
|
7,423 |
|
Operating loss |
(8,285 |
) |
|
|
(6,210 |
) |
Other (expense) income, net: |
|
|
|
Interest income |
3 |
|
|
|
35 |
|
Other (expense) income |
(670 |
) |
|
|
8 |
|
Total other (expense) income,
net |
(667 |
) |
|
|
43 |
|
Net loss and comprehensive
loss |
$ |
(8,952 |
) |
|
|
$ |
(6,167 |
) |
Net loss per share, basic and
diluted |
$ |
(0.06 |
) |
|
|
$ |
(0.17 |
) |
Weighted-average common shares outstanding, basic and diluted |
150,028,864 |
|
|
|
37,043,876 |
|
NOVAN, INC.Selected
Condensed Consolidated Balance Sheet
Data(unaudited)(in
thousands)
|
March 31, 2021 |
|
December 31, 2020 |
Cash and cash equivalents |
$ |
32,661 |
|
|
$ |
35,879 |
|
Total current assets |
41,178 |
|
|
44,007 |
|
Total assets |
46,983 |
|
|
46,829 |
|
Total current liabilities |
8,585 |
|
|
8,700 |
|
Total liabilities |
46,133 |
|
|
43,852 |
|
Total stockholders’
equity |
850 |
|
|
2,977 |
|
Total liabilities and
stockholders’ equity |
$ |
46,983 |
|
|
$ |
46,829 |
|
INVESTOR AND MEDIA
CONTACT:Jenene Thomas JTC Team,
LLC833-475-8247NOVN@jtcir.com
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