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Can Novan Nitric Oxide Based Approach pay off in the long run?

24 Dec Can Novan Nitric Oxide Based Approach pay off in the long run?

Novan, Inc. (NASDAQ: NOVN), a clinical–stage Biotechnology Company leveraging its expertise in nitric oxide-based therapies, has entered into a Master Services Agreement (MSA) with Catalent for supporting the development and chemistry, manufacturing and control (CMC) activities for berdazimer sodium, to be made into an intranasal formulation as part of its COVID-19 program.

Novan has already initiated in-vitro evaluation of its NITRICIL™ platform in studies conducted at the Institute for Antiviral Research at Utah State University. The results demonstrate the antiviral effect of nitric oxide based medicine, in a 3-D tissue model, similar to the human airway as per the Company. Based on the evidence available with respect to berdazimer sodium and SB206, nitric oxide has the potential to prevent viral replication, through its reactive intermediates, which can disrupt the protein function essential for viral replication.

Paula Brown Stafford, President and Chief Executive Officer of Novan commented

“We are pleased to be working with Catalent, and to benefit from its expertise in drug development and manufacturing, which is of particular interest to us in our COVID-19 program. We look forward to advancing into preclinical IND-enabling studies and taking another step towards unlocking the potential of our proprietary nitric oxide-based medicines.”

The Company is planning to file for a potential IND application with the FDA upon completion of preclinical studies and will initiate human clinical trials in H2, 2021, subject to availability of additional funding.

Novan Inc (NASDAQ: NOVN)

Market Cap: $97.65M; Current Share Price: 0.69 USDChart
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Industry
According to the World Health Organization (WHO), Coronavirus (CoV) is a family of viruses that cause illnesses ranging from common cold to lethal diseases such as the Middle East Respiratory Syndrome (MERS-CoV), Severe Acute Respiratory Syndrome (SARS-CoV) and a new strain of CoV named, novel coronavirus (nCoV). The virus is Zoonotic as it is transmitted from animals to humans, with the presence of many strains that have not yet infected humans. The infection manifests in the form of respiratory symptoms, cough, fever, shortness of breath and can take the form of pneumonia, severe acute respiratory syndrome, kidney failure and even death.

WHO had identified a new type of coronavirus, namely 2019 novel coronavirus (2019-nCoV) in China in early January 2020, which has so far infected 76,382,044 including 1,702,128 deaths according to the WHO Coronavirus dashboard. The disease which originated from the Chinese city of Wuhan, has spread to 168 countries, areas and territories. According to the US Centers for Disease Control and Prevention (CDC), there are 17,974,303 known cases across 39 states and 318,569 people have died so far in the U.S alone (as of December 22, 2020).

There is no definite cure for treatment or eradication of CoV, with treatment being limited to alleviation of symptoms, and providing support and care to patients. Scientists have been able to sequence the virus genetic code; spurring organizations around the world into action.

Operation Warp Speed is one such initiative that aims to provide 300 million doses of safe and effective vaccines and diagnostics. The initiative, which is essentially a partnership between Department of Health and Human Services (HHS) including Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH), and the Biomedical Advanced Research and Development Authority (BARDA), and the Department of Defense (DoD), will work with private firms and several federal agencies. The initiative has received over $ 10 billion in funding through the CARES Act and includes $6.5 billion designated for countermeasure development through BARDA and $3 billion for NIH research.

Company
Novan harnesses the natural antiviral and immunomodulatory mechanisms of action of nitric oxide to develop therapeutics for the treatment of dermatological and oncovirus-mediated diseases. The company intends to leverage its proprietary Nitricil™ technology that can create new chemical entities (NCE’s) along with its topical formulation science to develop product candidates for treatment of specific conditions.

Image Source: Company

The company’s work is centered on the power of the Nitric Oxide molecule that plays a vital role in biological functions such as wound healing, immune function, blood pressure regulation and neurotransmission by its ability to control inflammation, act as a defense mechanism against invading organisms and even fight cancer cells. It has numerous applications in dermatology as well owing to its anti-inflammatory and anti-microbial properties.

Novan’s NITRICIL™ technology can be used to create new chemical entities (NCE’s) that can store nitric oxide in the gaseous form on large polymers and regulate the size of the molecule, level of storage and timing of release to create targeted delivery.

Image Source: Company

The company’s pipeline consists of SB204, a once-daily topical monotherapy for the treatment of acne vulgaris, which has completed two successful Phase II clinical trials. In addition, it has candidates for Molluscum and external genital warts (SB206), Onychomycosis/ Tinea Pedis (SB208) and Atopic Dermatitis (SB414).

Furthermore the Company is exploring the application of Nitric Oxide in treatment of Men’s and Women’s health issues such as SB206 for genital warts and WH504 and WH602 for High-Risk HPV. Gastrointestinal diseases like Crohn’s and Irritable Bowel Syndrome and medical aesthetics such as Bromhidrosis, Hyperseborrhea, and Androgenetic alopecia are other areas where Nitric Oxide can make a difference.

The company has entered into a licensing agreement with the Japanese Company Sato Pharmaceuticals for SB204 meant for the treatment of acne vulgaris, this agreement was recently expanded to include SB206 for the treatment of viral skin infections including warts and molluscum contagiosum.

Key Takeaways

  • Novan is targeting a potential IND filing with the FDA for its intranasal formulation of berdazimer sodium for treatment of COVID-19 in 2021, SB206 (Berdazimer Sodium), its lead program is currently undergoing a crucial Phase 3 B-SIMPLE4 clinical trial for the treatment of molluscum and the Company intends to release the topline results by Q2, 2021 and file for an IND in Q2, 2021 as well.
  • The Company is developing a diversified pipeline of products that address the unmet needs in critical areas such as dermatology, men’s and women’s health and gastroenterology. A diversifies pipeline will help the Company mitigate its risk and make optimal use of its resources. The Company is also pursuing an exploratory companion animal health program and is working on the initial formulation development under the guidance of health experts.
  • Novan had $43.1M in cash and cash equivalents as of September 30, 2020 which the Company believes is sufficient to fund its operations and clinical trials through 2021. In addition, the Company has also secured nearly $50 million in capital from a common stock purchase agreement with Aspire Capital Fund, LLC and a direct and a public offering in March 2020.
  • Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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    References:

    https://www.globenewswire.com/news-release/2020/12/21/2148705/0/en/Novan-Engages-Catalent-to-Develop-Intranasal-Formulation-of-Berdazimer-Sodium-for-COVID-19-Program.html

    https://novan.gcs-web.com/static-files/aeb1b7d4-a905-4c30-b248-94504dd1bd62

    https://novan.gcs-web.com/news-releases/news-release-details/novan-reports-third-quarter-2020-financial-results-and-provides

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