Novan Therapeutics has closed on $11 million in financing as the company heads into clinical trials studying a potential new acne treatment.
The Durham company disclosed the new financing in an amended securities filing. The offering follows a $5.1 million round raised last April, in which the company said at the time that the financing could be expanded to $11 million. A total of 50 investors participated in the offering, according to the latest filing.
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Novan released laboratory and animal testing results on Thursday that it says indicate its investigational drug SB204 could be a topical treatment to reduce sebum, the oily, waxy secretions of the skin. Sebum production can be reduced with pills but they also carry risks of side effects. The company says none of the current topical products approved by the Food and Drug Administration reduce production of sebum. Novan aims to be the first.
By pursuing acne, Novan is targeting a U.S. acne market of more than 50 million Americans. In Novan-sponsored research in the lab of Dr. Diane Thiboutot, professor of dermatology at Penn State Hershey College of Medicine, SB204 started showing results within 24 hours following a single treatment.
Novan is a spin-off from the University of North Carolina at Chapel Hill. CEO Nathan Stasko founded Novan with UNC chemistry professor Mark Schoenfisch in 2008. Stasko was a graduate student working with Schoenfisch researching a nitric-oxide releasing nanoparticle technology. Nitric oxide has a wide range of therapeutic applications, such as wound healing and blood pressure regulation. The challenge has been nitric oxide’s short half life, which makes it difficult to use in medical applications. Novan has developed a way to control the release of the compound.
Patient enrollment in a phase II study of SB204 is expected to start in the second quarter. The goals of the study are to evaluate SB204’s safety and efficacy and also its ability to decrease sebum in the skin.
“We have invested significant resources to develop methods for the clinical evaluation of sebum in the skin,” Stasko said in a statement. “SB204 could be an attractive topical acne treatment and what we believe will be the first of many innovative products for the field of dermatology.”