MORRISVILLE, N.C., Feb. 25, 2021 (GLOBE NEWSWIRE) -- Novan, Inc. (Nasdaq: NOVN), today announced its financial and operating results for the year ended December 31, 2020 and provided a corporate update.
“With our accomplishments achieved over the course of 2020 and our near-term milestones ahead of us this year, we believe we are well-positioned for an exciting 2021. As enrollment has been completed in our pivotal Phase 3 study for molluscum, B-SIMPLE4, we are quickly approaching the expected readout of our top-line efficacy data, targeted before the end of the second quarter and are working to advance this important product candidate toward potential approval,” commented Paula Brown Stafford, President and Chief Executive Officer of Novan. “As we continue to grow and build momentum advancing our priority development pipeline and the NITRICIL platform technology, we are focused on preparing for success and equipping the Company with the necessary resources and capital.”
- Completed enrollment for B-SIMPLE4 pivotal Phase 3 trial for SB206 as a treatment for molluscum with top-line efficacy results targeted before the end of the second quarter of 2021;
- 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; and
- Announced Master Services Agreement with Catalent, Inc. to support chemistry, manufacturing and control activities and development of an intranasal formulation of berdazimer sodium for the Company’s COVID-19 program, SB019.
Priority Development Pipeline Update
SB206 – A Topical Antiviral Treatment for Viral Skin Infections (Molluscum Contagiosum)
The Company announced the completion of patient enrollment for B-SIMPLE4 on February 1, 2021. B-SIMPLE4 is a multi-center, double-blind, randomized, vehicle-controlled study to evaluate the efficacy and safety of SB206 12% once-daily in approximately 850 total patients (1:1 active:vehicle randomization), ages 6 months and above, with molluscum. The Company exceeded its enrollment target of 850 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 trial’s stated goal. Patients will be treated for 12 weeks with a safety follow-up visit at Week 24. The primary endpoint for the study is the proportion of patients achieving 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 assessed as treatment failures).
Upcoming Targeted Milestones:
- Top-line efficacy results targeted before the end of the second quarter of 2021, if the trial is not further impacted by the COVID-19 pandemic.
For more information about the B-SIMPLE4 trial, 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 our NITRICIL™ platform technology, berdazimer sodium (NVN10000), 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:
- Advancing this program through preliminary preclinical studies, which Novan targets to have results in the second quarter of 2021;
- Pending the results of the preclinical studies, anticipates filing a potential IND application with the U.S. Food and Drug Administration in 2021; and
- Targeting initiating human clinical trials in the second half of 2021, subject to 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 internal efforts for initial formulation development to assess viability and has engaged animal health experts to assess technical feasibility and market potential.
Upcoming Targeted Milestones:
- Engaging with a potential collaborator or strategic partner to advance development in this area upon positive proof-of-concept work.
Summary of Full Year 2020 Financial Results
- As of December 31, 2020, Novan had a total cash and cash equivalents balance of $35.9 million and positive working capital of $35.3 million.
- As of December 31, 2020, the Company had an accumulated deficit of $249.3 million and there is substantial doubt about its ability to continue as a going concern. The Company believes that its existing cash and cash equivalents balance, plus expected contractual payments to be received in connection with existing licensing agreements, will provide it with adequate liquidity to fund its planned operating needs into the first quarter of 2022, based on management’s projections and planned development and operating activities described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
- Novan incurred net losses of $29.3 million and $30.4 million in the years ended December 31, 2020 and 2019, respectively.
- License and collaboration revenue of $4.2 million and $4.5 million for the years ended December 31, 2020 and 2019, respectively, was associated with the Company’s performance during the period and the related amortization of non-refundable upfront and expected milestone payments under one of the Company’s license agreements.
- Research and development expenses were $19.8 million for the year ended December 31, 2020, compared to $25.2 million for the year ended December 31, 2019. The net decrease of $5.4 million was primarily related to (i) a net $0.7 million increase in the SB206 program, (ii) a $4.3 million decrease in other research and development expenses, and (iii) a $1.6 million decrease in the SB414 program. The $4.3 million decrease in other research and development expenses was primarily driven by (i) a $1.3 million net decrease in research and development personnel costs, (ii) a $1.6 million decrease in costs associated with Novan’s manufacturing technology transfer projects to third-party manufacturers, (iii) a $0.7 million decrease in depreciation expense and (iv) a $1.0 million decrease in manufacturing materials and support costs at the Company’s previous primary facility, partially offset by $0.3 million of discrete costs incurred during the second and third quarters of 2020 related to decommissioning manufacturing capabilities at the Company’s previous primary facility.
- General and administrative expenses were $11.3 million for the year ended December 31, 2020, compared to $10.4 million during the year ended December 31, 2019. The increase was primarily due to $1.7 million of aggregate non-cash expense related to the issuance of commitment shares as consideration for entering into common stock purchase arrangements with Aspire Capital Fund, LLC, partially offset by a $0.5 million decrease in general and administrative personnel and related costs and a $0.3 million decrease in other general and administrative expenses.
- For the year ended December 31, 2020, the Company recognized $2.3 million of non-cash impairment charges related to the July 2020 termination of its previous primary facility lease and a $1.8 million loss on the disposition of related assets, of which $0.8 million was a non-cash charge.
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.
Molluscum contagiosum is a common, contagious skin infection caused by the molluscipoxvirus, affecting approximately six million people in the U.S. annually, with the greatest incidence in children aged one to 14 years. Infected children typically present with 10 to 30 painless, yet unsightly lesions, and, in severe cases, they can have around 100 lesions. Due to the largely pediatric nature of the disease, parents are the caregivers for these children, in most cases, and tend to seek treatment. There are no U.S. Food and Drug Administration approved therapies for molluscum, and, upon seeking treatment, caregivers are faced with potentially painful in-office, dermatologist-administered physical procedures or cantharidin, or recommended off-label prescriptions and over-the-counter products. More than half of the patients diagnosed with molluscum are untreated and over 30% of those treated receive an off-label prescription with no molluscum indication or proven clinical efficacy. The average time to resolution is 13 months, however, some children experience lesions that may not resolve in 24 months. Further dissemination of this highly-contagious disease is common, and transmission to other children living in the household is reported to be 41%. There is a significant unmet need in the molluscum treatment landscape.