​Novan Inc., a North Carolina pharmaceutical company, filed for an initial public offering of $60 million.

Durham-based Novan focuses on nanotech dermatology and uses nitric oxide for topical formulations. It plans to use the proceeds from the offering to fund drug development and a new drug application. Novan raised north of $100 million since 2011, according to regulatory filings.

Among its Triangle backers are board chairman Neal Hunter, is a co-founder of Cree, and SAS CEO Jim Goodnight. According to filings with the US Securities and Exchange Commission, 172 investors backed the company in venture rounds.

(Watch a video overview of the company at: https://www.youtube.com/watch?v=6Z02CtB1TOA)

Wave of news in 2015

The company also has reported a wave of big news last year, from plans to build a production facility for its products to advancing its lead acne product to stage 2 clinical trials to hiring new executives for its management team.

Novan reported a net loss of $29.2 million in the first six months of the year. It reported a net loss of $28.1 million in 2015. It has had no revenue.

Piper Jaffray & Co., JMP Securities LLC, and Wedbush Securities Inc. are underwriting the offering. The filing lists the historical book value per share before the offering as negative $30.25 and positive $1.19 after going public.

Risks associated with purchasing the stock include Food and Drug Administration disagreements with clinical trails, obtaining institutional review board approval at locations, recruiting patients for trials, and safety concerns.

Novan is focused on what it calls “impactful, first-in-class, nitric oxide-based healthcare solutions in a number of large market indications.”

In September last year, Novan reported “successful Phase 2b Results” for its SB204 compound intended for the treatment of acne. That news was followed by the bolstering of its management team.

Acne affects about 40 million to 50 million Americans each year. Last year the company raised $50 million in financing for acne drug development.

President and CEO Nathan Stasko received a salary of $340,000 and a bonus of $174,000 in 2015. He also owns more than 1 million shares of the company, or about 7.79 percent of the stock.

Stasko founded the company with University of North Carolina at Chapel Hill chemistry professor Mark Schoenfisch in 2008. Stasko was a graduate student working with Schoenfisch researching a nitric-oxide releasing nanoparticle technology. Many companies pursue nanotechnology to improve delivery of a therapeutic compound.

Therapeutic potential

Nitric oxide’s therapeutic potential ranges from uses in immune system response, wound healing and blood pressure regulation. Despite the array of potential applications, use of nitric oxide has been limited by a short half life that makes it difficult to harness for medical applications. Schoenfisch and Stastko’s research involved a controlled release of the compound in a way that could make use of its benefits.

In 2010, the company landed a $140,761 National Science Foundation grant to develop a way to scale up the manufacturing process of a nitric oxide drug candidate with the potential to address healthcare infections. In 2011
Novan was awarded a $69,821 Department of Defense contract to research its technology as a topical wound care product to treat military personnel.

Read more at:

https://wraltechwire.com/business/tech_wire/news/blogpost/11162493/#hHMjsuQ8m5PCRaY0.99

And at:

https://wraltechwire.com/novan-adds-another-1-5m-to-big-fund-raising-round/15205765/#0tbmcEUjXMSGeTWy.99

Note: This story includes reporting from the North Carolina Business News Wire, a service of UNC-Chapel Hill’s School of Media and Journalism